Education Loan

MGB Education Loan Scheme

Purpose

To help students pursue higher education in recognized institutions

Type of Facility: Term Loan

Eligibility

Nationality:
- The student should be an Indian National (including Non-Resident Indian [NRI]).
- For Persons of Indian Origin (PIO) / Overseas Citizens in India (OCI), and students who are born abroad (overseas citizenship by birth, when parents were on deputation with Foreign Government/Government agencies or International / Regional Agencies etc.) and are now studying in India after repatriation of their parents, loans can be considered for studies in India only. However, such facility will be subject to Regulation 7 (C) of Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000 [Notifications No.FEMA.4/2000-RB dated 3rd May 2000 and further amended vide Notification No.FEMA.115/2004-RB dated 25th March 2004]. (Bank may adopt their Board approved policy for Risk Mitigation)
Admission:
- Should have secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test/ Merit Based Selection process after completion of HSC (10 plus 2 or equivalent).
- For studies abroad, Bank may at their discretion consider granting loans on the basis of invite / conditional offer letter, if demanded by the Educational Institution.

Limit

Need based finance to meet the expenses will be considered taking into account minimum margins.

The threshold limit under various subsidy schemes of Government of India will be as per the respective scheme notifications.
As per RBI notificationRBI/FIDD/2020-21/72 dated 04.09.2020 and updated on 29.04.2021, loans to individuals for Education purposes including vocational courses upto Rs.20 Lakh irrespective of the sanctioned amount are eligible for classification under priority sector, which is subject to change from time to time.

Margin

Minimum Margin Requirements for Study In India
- Upto Rs. 4 lakhs: Nil
- Above Rs. 4 lakhs and upto Rs. 7.5 lakhs: 5%
- Above Rs. 7.5 lakhs: 25%
Minimum Margin Requirements for Study In Abroad
- Upto Rs. 4 lakhs: Nil
- Above Rs. 4 lakhs and upto Rs. 7.5 lakhs: 15%
- Above Rs. 7.5 lakhs: 25%

Security

Loan Amount	Security Required
Upto Rs. 4 lakhs	No security Parent(s) / guardian(s) to be joint borrower(s).
Above Rs. 4 lakhs and upto Rs. 7.5lakhs	Parent(s) / guardian(s) to be joint borrower(s) along with suitable third-party guarantee. The bank may, at its discretion, in exceptional cases, waive third-party guarantee if satisfied with the net-worth / means of parent/s / guardian(s) who would be executing the document as joint borrower(s).
Above Rs. 7.5 lakhs	Parent(s) / guardian(s) to be joint borrower(s) Tangible collateral security of suitable value acceptable to the bank.

Repayment

Repayment Holiday / Moratorium: Course period + 1 year.
Repayment of the loan will be in equated monthly instalments for a period of 15years for all categories (excluding course and moratorium period).