Student Bank Loan Scheme for Indian Students of Higher Education

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Table of Contents Student Bank Loan Scheme’s Objective, A guide for parents considering an education loan for their children. How Student Bank Loan works Student Bank Loan Interest Rates Bank Loan Interest Rates Concessions Loan Repayment Schedule Student Bank Loan What happens if I drop out? Student Bank Loan Moratorium Period

The Government of India has now approved a scheme to provide full interest subsidy during the moratorium period, i.e., Course Period plus one year, or six months after getting a job, 

Whichever is earlier, on loans taken by students from scheduled banks under the Educational Loan scheme of the Indian Banks' Association, for pursuing any of the approved courses of studies in technical and professional streams, from recognized institutions. 

The Scheme's name would be "Central Scheme to provide Interest Subsidy (CSIS) for the period of moratorium on Educational Loans taken by students from Economically Weaker Sections from scheduled banks under the Educational Loan Scheme of the Indian Banks' Association to pursue Technical and Professional Studies."

The Student Loan Scheme (SLS) was introduced by the Ministry of Human Resource Development to help eligible students from low-income families to fund their education. In addition to the course fees, SLS can also be used to pay for your study materials and living costs. 

To be eligible for the scheme, you must meet the following criteria: Be an Indian citizen. Be enrolled in an approved undergraduate program at an approved institution in India.

Students in India can apply for the student loan scheme to pay for course fees, study materials and living costs. This article will explain the benefits of applying, how to apply and the repayment process. 

How Student Bank Loan works

The Student Loan Scheme for Indian Students is a government-backed loan program that provides financial assistance to eligible students studying in India. 

The loan amount can be used to pay for course fees, study materials, and living costs. Repayment of the loan begins six months after graduation or a Year after,  depending on your Bank, Different Bank offers different free periods. The interest rate on the loan is subsidized by the government, making it one of the most affordable financing options for students in India.

The loan is available in two tranches - a pre-matriculation loan and a post-matriculation loan. The pre-matriculation loan can be used to pay for fees and charges before enrolment, while the post-matriculation loan helps with living expenses after completing enrolment. Post matric students are eligible to borrow up to INR 4Lac as a student business loan. Application Process: To apply for one of these loans from your bank, you will need all relevant documents on hand.

You must fill out an application form, which you can get from your bank. You'll be required to submit financial documents (such as a copy of your income tax return), academic records and legal proof of residence. 

Student Bank Loan

Each bank has its own procedure and policies regarding student loans, so it's best to contact your individual lender directly with any questions you may have. Do note that in order to be eligible for a loan under the Student Loan Scheme for Indian Students, you must be enrolled at a recognized higher education institution in India. 

If you want to study outside of India, look into getting a private student loan.

Once you're done with your schooling and have found a job, repayment of your loan begins six months after graduation or a year after graduating (whichever is later). Your monthly repayments will be taken directly from your salary. Although some banks may allow you to make voluntary prepayments on your loan in order to reduce its term and interest rate. If you have any trouble repaying your loan or would like more information on its terms and conditions, it's best to contact your bank directly.

Student Bank Loan Interest Rates

The interest rates charged on the educational loan shall be as per the BPLRJ (Benchmark Prime Lending Rate) Base Rate of the individual banks and as per the provisions for interest rates under the IBA (Indian Bank Association)Model Educational Loan Scheme.  These loans will have a tenure of up to 10 years from the date of issue. We will Share Student Bank Loan Interest rates shortly from recognized and leading Bank in our New article, it will be reflected  in our web 30th July 2022 (So Please Make bookmark this article in your browser is recommended)

Student Bank Loan Interest Rates Concessions

The IBA Scheme provides a 1% interest concession to loanees if the interest is serviced during the repayment holiday specified for interest repayment under the scheme. This 1% interest subsidy would be extended under the Central Scheme of Interest Subsidy, provided that the Government of India disburses interest subsidy claims to banks on a semi-annual or yearly basis.

Student Bank Loan Repayment Schedule

You'll have to start repaying your student loan once you're earning a certain amount of money. In India, the repayment schedule is like the SBI Student Loan, which offers repayment  in 15 years. 

Student Bank Loan What happens if I drop out?

You will still have to repay your student loan if you drop out of your course. If you're struggling to make repayments, you can contact your lender to discuss your options. You may be able to extend your repayment period or switch to a different repayment plan. If you're still struggling, you can apply for a hardship variation. This will give you some temporary relief from making repayments. 

However, this could also result in more interest being added to the amount you owe and delaying when you are expected to pay off the debt. A Hardship Variation won't stop your repayments altogether, but it might mean that they are smaller than they would have been otherwise. But if any alternative is available once check your banker before taking any decision, once meet with your banker and discussed it in detail. 

This option can be useful if you're struggling financially and only need a bit of time to get back on your feet again. But keep in mind that if you don't continue with your course or earn less than predicted, changes may be made to what you'll repay each month and how long it will take you to pay off your loan.

Student Bank Loan Moratorium Period 

The student loan moratorium period is the time during which a student is not required to make any repayments on their loan. This period typically lasts for six months after a student graduates or leaves their course. In India, the Student Bank Loan Moratorium Period is set at two years. This means that students will not have to start making repayments on their loans until two years after they have graduated or left their course.

Under the Central Scheme, the interest payable by the student belonging to EWS (Early Warning Signals) for availing of the Educational Loan for Technical Professional Courses in India for the period of moratorium, i.e., Course Period plus one year or six months after getting job, whichever is earlier, as prescribed under the Educational Loan Scheme for the Indian Banks' Association, shall be borne by the Government of India. 

After the period of moratorium is over, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing educational Loan Scheme of Banks and as may be amended from time to time, whichever is earlier. 

Student Bank Loan Cancellation policy

It is possible to cancel a student loan with some conditions. However, you must be familiar with the terms and conditions that must be followed in order to cancel the Education Loan.

Along with meeting certain requirements, you must also provide certain proof to meet those specific requirements. When you request a loan cancellation, you are asking the lender to cancel the portion of debt that you still owe. If the lender agrees to cancel or write off the loan, you are free of all liabilities, though you must still pay taxes on the debt that was cancelled.

If you want to cancel a loan before it is disbursed, you can send an email or go to the bank and explain why you want the loan cancelled or present an  application. The bank will then reverse the loan sanctioning process.

If the loan is to be cancelled after it has been disbursed, it may be cancelled under the following conditions:

Dropped out of college - If the borrower wishes to withdraw from the course for which he or she has obtained a loan from the college, the bank agrees to cancel the loan.

Cancellation due to death - If the borrower dies before the debt is fully paid, all loans are cancelled.

In all of the above circumstances, as well as for any other reason (if any), you must pay the debts if you are still within the bank's specified time frame. Some banks also charge cancellation fees if a loan is cancelled during its term. Before applying for a loan, go over all possible scenarios with the lender.

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