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Quantum of loan
Margin
Up to Rs.4 Lakh
Nil
Above Rs.4 Lakh
Studies in India
5%
Studies abroad
15%
NRI students (irrespective of loan amount)
Security
No security required, if the loan is covered under CGFSEL.
Above Rs.4 Lakh & up to Rs.7.50 Lakh
Above Rs.7.50 Lakh
Tangible collateral security of minimum value equivalent to the loan amount and interest accumulation during course & moratorium period, acceptable to the bank**
What is the maximum loan amount? Need based finance to meet the expenses will be considered taking into account margins norms. There is no restriction on maximum amount of loan that can be sanctioned to the students of Indian nationality under the education loan scheme. For NRI students Maximum quantum Rs.20 Lakhs & Rs.30 Lakhs for premium institutes. Under our special education schemes, please visit our nearest branch to know maximum amount for premier institutes.
Who can be the co-applicants for the education loan? Parents (either father or mother) can be the co-applicant. In case both parents are not there, the guardian can become the co-applicant. In case of married applicants, the spouse/parent-in-laws can become the co-applicant.
What is the maximum loan repayment tenure ? Maximum repayment tenure (after the course and moratorium period) is 15 years irrespective of the loan amount.
What are the applicable rates of interest? Please click here for information on rate of interest.
What are the processing charges? Nil for Indian students. Processing charges of 0.50% of the loan amount, subject to a maximum of Rs.10000/- plus GST for NRI students.
How is the interest charged/calculated? Interest will be applied in the account on the basis of reducing balance method at monthly rests. During moratorium period compounding interest would not be charged
What is a Monthly Reducing balance? An Equated Monthly Instalment (EMI) has 2 components, interest and principal. When the interest is calculated on monthly rests, the principal on which the interest is charged goes down every month. This results in a significant saving for the customer over the tenure of the loan.
How do I repay the Education loan? The loan shall be repaid in equated monthly instalments (EMIs). You can pay the EMI in any of the following ways Through standing instruction to your Union Bank of India savings account to directly remit the EMI amount to your loan account Through internet banking facility available on your Union Bank of India savings account ECS (Debit) facility Post Dated Cheques (PDCs)
Can I prepay my education loan? Yes, you can make your prepayment. There is no charge on pre-payment if the loan is adjusted by the borrower from his own verifiable legitimate sources.
What security/ collateral do I have to provide? The security required is as mentioned below.
Upto Rs. 4 Lakhs
Above Rs.4 - 7.5 Lakhs
Suitable third party guarantee acceptable to the bank to be taken
Above Rs.7.5 Lakhs
Collateral security of suitable value is required
Is a guarantor a must? No Guarantee required for the loan up to Rs.4.00 Lakh. Only parent / guardian of the student who is availing loan have to join-in as co-borrower For the loan above Rs.4.00 lakh to Rs.7.50 Lakh, if the loan is covered under CGFSEL, only parent / guardian of the student who is availing loan have to join-in as co-borrower. However, for the loan above Rs.7.50 lakh, if the security provided is in the name of person other than parent/guardian, his/her guarantee is required.
What are the tax benefits I get from my education loan? Tax benefits can be claimed on the interest component of the education loan as per the Income Tax Act, 1961. An amount equal to the interest amount paid can be claimed for deduction under section 80E.
Do I need to open an account with Union Bank of India for availing and/ or servicing the education loan? Although opening of account is not mandatory for availing a loan, we would recommend to bank with us in order to benefit from other value added services.
Do I need to serve the interest during the study or moratorium period? No, it is not mandatory to serve the interest during the study. However, if interest is regularly serviced during the course and moratorium period, i.e. prior to the commencement of repayment, then the student is eligible for 1% interest rebate.
What documents do I need to submit to avail an education loan? Please see the Forms & Documents Tab above for information on the list of documents required
How much time will it take for my education loan to be approved? It takes 7 days for your loan to be sanctioned, after you have submitted all the documents.
What are the stages involved in taking a loan? There are three main stages - Application - Whereby you submit a completely filled in application with all necessary documents Sanction - Whereby you get an approval for a specific loan amount based on the value of your property and repayment capabilities Disbursement - Whereby the loan amount is disbursed
How do I approach Union Bank of India for education loan? You can approach us in any of the following ways You can visit any of our special retail lending branches called Union Loan Points (ULPs). To locate a ULP, click here You can visit any of our branches. To locate a branch, click here Request for a contact online You can also contact our 24 x 7 Call