Educational Loan from Banks

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 limit 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. Provided below are links to the respective websites of individual banks offering such facilities. Click on the name of each bank to visit their website

List of Banks Offering Educational Loans 

• Allahabad Bank	• Panjab National Bank
• Andhra Bank	• State Bank of India
• Bank of Baroda	• State Bank of Bikaner and Jaipur
• Bank of India	• State Bank of Hyderabad
• Bank of Maharashtra	• State Bank of Indore
• Canara Bank	• State Bank of Mysore
• Central Bank of India	• State Bank of Saurashatra
• Corporation Bank	• State Bank of Travancore
• Dena Bank	• Syndicate Bank
• Indian Bank	• Uco Bank
• Indian Overseas Bank	• Union Bank of India
• Oriental bank of Commerce	• United Bank of India
• Panjab and Sindh Bank	• Vijaya Bank
• Federal Bank Limited