SBI Education Loan details

Visited the SBI's (State Bank of India) St. Marks Road Branch to check out details of Educational Loan

Details:

• Amount of Loan: 20 Lakhs INR
• Loan Processing Time: 1 month (approx) (Valuation of property takes time)
  
• Applicants: Student as main applicant and parents are co-applicants
• Repayment Period: 7 years (max)
• Rate of Interest: 12.5% pa# (Floating)
• Processing Fees/File/Miscellaneous Charges : Nil ^
• Margin money: Didn't check
  
• Security: Tangible property like House as collateral
• Conversion Charge from INR to $: To be checked
  
• Money transfer mode: The money will be transferred directly to the university upon request-takes approx a week. Rs 600 charged every time for draft mode and Rs 1000 for TT mode.
  

# The Rate of Interest is decreased by 1% (i.e. its 11.5%) if the interest is paid during the moratorium period (the time period when the re-payment of loan has not started)
^ SBI collects a cheque of Rs 5000 for processing, but this is returned if the loan facility is availed. In case, the applicant doesn't avail the loan, Rs 5000 are not refunded.

Documents Required:

1. Loan Application form
2. Copy of the offer of acceptance from University
3. Details of expenses from University including Tuition fees, living expenses etc.
   
4. Mark-sheets of 10th, 12th and qualifying degree (e.g. B.Tech)
5. Photograph of applicant (2)
6. IT Return and Form 16 for co-applicants for last 3 years (not for applicant-student)
7. Copy of applicant's passport
   

Certain answers to questions in particular

• Which location should the loan be taken? Preferably at the location where the collateral is there
• Can I get a loan sanctioned for Rs 20 Lakhs, but use only 10 Lakhs? If yes, what about interest? YES, this can be done. The amount which is withdrawn from the sanctioned amount only is calculated for interest [You might need to withdraw a small part of loan initially-can be as small as 50,000. Its like using your credit card the first time to activate it. Check with bank as this can very with bank to bank]
  
• Can I get a loan sanctioned for Rs 20 Lakhs, but withdraw 10 Lakhs now and rest 10 Lakhs after 6 months? If yes, what about interest? YES, this can be done. The interest will start to be calculate only when the amount is withdrawn. e.g. In May, the first 10 Lakhs is withdrawn, the interest will start the time the money has been withdrawn. In December, the second 10 Lakhs is withdrawn, so the interest on the second 10 Lakhs start from December
  

Related Links:

• Education Loan@ SBI : http://www.sbi.co.in/viewsection.jsp?id=0,1,20,118
• Education Loan Application Form @ SBI: http://www.sbi.co.in/downloadfile.jsp?fileid=82
• Education Loan Details from Indian Bank's Association : http://www.iba.org.in/educational_loan.asp
• Education Loan Details of various banks in India: Link

Terms used:
A collateral loan is also called a secured loan. It is a loan obtained from a banking or other financial institution, where in exchange, the creditor may sell that which is offered for collateral if the loan is unpaid. A collateral loan is often offered at a lower interest rate than an unsecured loan, because there is a guarantee of repayment should the borrower default on the loan (http://www.wisegeek.com/what-is-a-collateral-loan.htm)

Margin Money: Banks lend out huge money in the form of home loans. Margin money can be best described as an upfront down payment that reassures the lender of the borrower's financial stability and commitment. The upfront down payment can range from as low as five to as high as 15 percent. ( Economic Times Link )