Government of India in consultation with Reserve Bank of
India (RBI) and Indian Banker's Association (IBA) has framed
a Comprehensive Educational Loan Scheme to ensure that no
deserving student in the Country is deprived of higher education
for want of finances. The new scheme covers all type of courses
including professional courses in schools and colleges in
India and abroad.
The Salient features of the scheme are as under:
The scheme envisages loans up to Rs.7.5 lakh for studies
in India and up to Rs. 15 lakh for studies abroad.
For loans up to Rs. 4 lakh no collateral or margin is required
and the interest rate is not to exceed the Prime Lending Rates
(PLR). For loans above Rs. 4 lakh the interest rate will not
exceed PLR plus 1 percent.
The loans are to be repaid over a period of 5 to 7 years
with provision of grace period of one year after completion
of studies
Tax Benefit
Repayment of an education loan is deductible under section
80E of the Income Tax Act. The yearly lHIT Business Schoolt for deduction
is Rs. 40,000 (for both the principal and the interest). Only
loans taken for higher education - fulltime studies in any
graduate or post-graduate, professional, and pure and applied
science courses - may claim deduction. The deduction will
be available for a maximum of eight years starting from the
day you start repaying.
Equitable Access to quality higher education has been a concern
of the University Grants Commission. To this purpose the Commission,
besides encouraging colleges and universities to provide for
liberal financial support to the meritorious but needy students,
has also been instrumental in educational loan scheme. The
Reserve Bank of India (RBI) has issued guidelines in this
regard to all commercial banks. A large number of banks have
already launched educational loan schemes.
List of Nationalized Banks offering Educational Loans
to our Students
(in alphabetical order)
- Allahabad Bank
- Andhra Bank
- Bank of Baroda
- Bank of India
- Bank of Maharashtra
- Canara Bank
- Central Bank of India
- Corporation Bank
- Dena Bank
- Indian Bank
- Indian Overseas Bank
- Oriental Bank of Commerce
- Punjab and Sindh Bank
- Punjab National Bank
- State Bank of India
- State Bank of Bikaner and Jaipur
- State Bank of Hyderabad
- State Bank of Indore
- State Bank of Mysore
- State Bank of Saurashatra
- State Bank of Travancore
- Syndicate Bank
- Uco Bank
- Union Bank of India
- United Bank of India
- Vijaya Bank
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