Loan for Studies in India Most
of the Public Sector Banks in India have categorized Student Loans in
two categories. For Studies in India , Students can borrow up to Rs 4
lakh without providing any security or margin. A loan amount of Rs 4 lakhs to Rs 7.5 lakhs
can be availed against a third-party guarantee. This loan comes with a
five percent margin (what this means is that you will get five percent
less the amount sanctioned as loan; you will have to put together the
rest of the money). The third-party guarantee can come from an uncle,
neighbor or friend standing guarantee for the full amount.

Overseas study loans
: Amounts worth Rs 7 lakhs and above are usually sanctioned against
fixed deposits, NSC certificates, property worth the loan amount and a
margin amount of 15 percent (what this means, again, is that you will
get 15 percent less the amount sanctioned as loan; you will have to put
together the rest of the money). Also, if a loan below Rs 4 lakhs comes
at x rate of interest, the loan over Rs 4 lakhs is usually charged one
percent higher interest. The Reserve Bank of India prescribes the
specifics (amount, rate, repayment period) of education loans and the
government provides a two per cent subsidy on these loans to the banks.

Important Note : Indian Banks’ Association (IBA) has recently formed a working group to address the issue of student loans
and the rising rate of default. The group has submitted its findings to
the Reserve Bank of India and the main suggestion is to make it
mandatory for parents or guardians, of the student borrowing loans, to
be co-borrowers thereby making them liable for repayment.

Banks Providing loan