Are tax benefits available for SBI education loans?

Yes, the interest paid on education loans also qualifies for tax deductions under Section 80E of the Income Tax Act, which saves the borrowers some money.

When does the repayment period start for SBI education loans?

Repayment typically begins 6 months to 1 year after course completion, allowing students time to secure employment.

Can I prepay my education loan with SBI?

Yes, SBI allows prepayment of loans without any penalty, giving borrowers the flexibility to reduce their financial burden early.

What is the maximum tenure for SBI education loans?

The loan tenure can go up to 15 years, ensuring borrowers have sufficient time to repay comfortably.

How can I calculate my potential income tax savings?

You can use an Income Tax Calculator to estimate your tax liabilities and savings based on your income and eligible deductions.

SBI Education Loan MITC

The SBI Education Loan is a loan scheme that helps students cover their education costs without the pressure of paying back immediately. With repayments starting only after course completion, it provides the flexibility needed to focus on studies and transition smoothly into a career. The loan offers straightforward terms, making it easier to manage education expenses. Meant for students who need financial support, the SBI Education Loan ensures a smooth academic journey. In this article we will discuss the SBI student loan scheme and its most important terms and conditions (MITC).

Investing in your child's future:A wise decision & a loving choice

Benefits of Investing In Child Plan

Waiver of Premium Benefit

Future Premiums are paid by the insurer upon death of policyholder

Flexible Payout Options

Your premiums help your child achieve their dreams through lump sum or regular payouts

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Tax Benefits^

You get tax benefits under Section 80(C) and no tax on returns under Section 10 (10D)

Investment Flexibility

It offers the flexibility to invest at regular intervals or as a one-time contribution

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7.7 Crore

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Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

About SBI Education Loan Scheme

SBI Education Loan Scheme assists students pursuing education in India and abroad at all levels — from undergraduate to post-graduate courses. The loan covers all expenses, from tuition fees to exam fees, accommodation, travel costs for study abroad, costs of books and materials. Additionally, SBI provides flexible repayment terms with a period of moratorium of up to one year from the completion date of course or six months from the time of securing employment, whichever is earlier. Along with that, the bank also offers a child investment plan so that parents can plan and secure their child’s future education. This takes a complete approach to managing educational costs and securing a student’s future without financial stress.

Rate of Interest

Here’s a breakdown of the interest rates and available concessions under the SBI Education Loan:

Without Collateral (Up to ₹7.5 lakh): 11.15% per annum
With Collateral (Above ₹7.5 lakh): 10.15% per annum
Takeover above ₹10 lakh (with collateral): 10.15% per annum
Concession: A 0.50% concession in interest for girl students

Features of SBI Education Loan Scheme

The SBI Education Loan Scheme provides the following features that make it a great option for students:

Loan Amount:
- For studies in India: Up to ₹1 crore for selected institutes and up to ₹50 lakhs for all others.
- For studies abroad: Maximum ₹7.50 lakhs.
Repayment Tenure:

Up to 15 years, providing ample time for repayment.
Moratorium Period:

Course period plus 6 months to 1 year after completion before repayment begins.
Processing Fees:
- Loans up to ₹20 lakh: Nil.
- Loans above ₹20 lakh: ₹10,000 + applicable taxes.

Following the features of the SBI Education Loan Scheme, a child education allowance can also be considered to assist with the financial needs of your child's education.

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Eligibility for SBI Education Loan Scheme

To be eligible for SBI's education loan schemes, applicants must meet the following criteria:

Nationality

To study in India, one must be an Indian national or an OCI, PIO, or NRI.

Those who study overseas should be Indian nationals or OCIs (who have obtained admission to a reputable university or institution and reside in India.
Academic Admission

You require a secured admission to recognised institutions in India or abroad through entrance tests or merit-based selection.
Courses Covered

Graduate, postgraduate, and professional courses approved by UGC, AICTE, IMC, or the government.

Unique Triple Benefit

Future premiums paid by insurer on parent's death

Monthly income to fund child's education on parent's death

Lumpsum payout to family on parent's death

Returns

Return as of Apr 2024
12%-15%
8.2%
7.1%

Availability

Availability
Girl Child or Boy Child
Girl child only
Girl Child or Boy Child

Max Entry Age
Upto 18 years
Upto 10 years
No Age Limit

Flexibility

Invested Amount can be Withdrawn after
5 years
21 years
15 years

Conditions for Premature closure
Anytime after 5years
Extreme Compassionate Grounds
Serious Ailments or for education

Penalty on Premature Closure
No Penalty after 5 years
Returns reduced to Post Office Savings rate
1% reduction in interest rate

Max deposit amount in an year
No Limit
1.5 Lacs
1.5 Lacs

Documentation

Documentation Required for Withdrawal
Low
High
Low

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Documents Required for SBI Education Loan

Applicants need to provide the following documents when applying for an education loan with SBI:

Identity Proof

PAN Card, Passport, Driver's Licence, or Voter ID card.
Address Proof

Recent utility bills (electricity, water), Aadhaar card, or passport.
Academic Records

Mark sheets of 10th and 12th standards, graduation (if applicable).
Proof of Admission

Admission letter from the educational institution.
Income Proof

Latest salary slips or income tax returns of the co-borrower (parent or guardian).
Collateral Documents (if applicable):

Property documents, fixed deposit receipts, or other securities.

Most Important Terms and Conditions (MITC)

The following are the essential considerations for the SBI Education Loan for effective planning and timely repayment:

Interest Accrual

Interest accumulates during your course and moratorium period, but you can pay it off to reduce the loan burden.
Margin

Up to ₹4 lakh: Nil

Above ₹4 lakh:
- Studies in India: 5%
- Studies Abroad: 15%
For education loans up to ₹4 lakh, there is no margin required from the borrower. However, for loans exceeding ₹4 lakh, the margin varies based on the location of studies. For studies within India, a 5% margin is applicable, while for studies abroad, the margin increases to 15%. This ensures a balanced contribution from the borrower towards the overall cost of education.
Guarantor Requirement

A guarantor, typically a parent or guardian, will be required to secure the loan.
Insurance

Optional loan insurance is available to cover unforeseen circumstances.

By combining the Child Education Plan offered by SBI with an SBI Education Loan, you can effectively secure long-term savings for your child's future education while also addressing immediate educational expense

FAQs

Are tax benefits available for SBI education loans?

Yes, the interest paid on education loans also qualifies for tax deductions under Section 80E of the Income Tax Act, which saves the borrowers some money.
When does the repayment period start for SBI education loans?

Repayment typically begins 6 months to 1 year after course completion, allowing students time to secure employment.
Can I prepay my education loan with SBI?

Yes, SBI allows prepayment of loans without any penalty, giving borrowers the flexibility to reduce their financial burden early.
What is the maximum tenure for SBI education loans?

The loan tenure can go up to 15 years, ensuring borrowers have sufficient time to repay comfortably.
How can I calculate my potential income tax savings?

You can use an Income Tax Calculator to estimate your tax liabilities and savings based on your income and eligible deductions.

†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.