SBI Take-Over of Education Loans

In addition to SBI's customer-friendly policies, this scheme allows borrowers to transfer the balance of their current education loans from other banks or financial institutions to SBI in order to receive a reduced interest rate and a longer loan repayment period. Students can focus more on passing tests and other associated courses without sacrificing quality when they need a comparatively smaller sum of money. In a similar vein, families also benefit from financial stability because they know they are working with a reputable company that has proven its capacity to finance education. 

About SBI Take-over of Education Loans

The goal of SBI's education loan scheme is to support families and students by transferring their current debts from other banks or financial organisations to SBI. This transfer guarantees longer repayment terms, better interest rates, and other benefits. The loan is a comprehensive option since it covers living expenditures, travel expenses, and tuition fees, among other educational costs. 

This initiative aligns with SBI’s other education-oriented offerings, such as plans for securing a child’s education for long-term academic goals.

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SBI Education Loan Interest Rates

The SBI education loan scheme offers competitive interest rates:

Note: EBR = Repo Rate + Spread. Currently:

• Repo rate = 6.50%

• Spread = 2.65%

• EBR = 9.15%

Borrowers can also take advantage of tax benefits under Section 80E of the Income Tax Act. 

Features of SBI Take-over of Education Loans

Here are some highlights of this scheme:

• Loan Coverage: Includes tuition fees, travel, living expenses, and other education-related costs.

• Loan Limit: Up to ₹1.5 crore for premier institutions.

• Repayment Tenure: Up to 15 years, including a moratorium period.

• Subsidies: Special government subsidies for economically weaker sections.

• Hassle-free Disbursement: Direct payments to educational institutions.

For families planning their child’s future, this scheme works well alongside SBI’s broader offerings, such as child education plans.

Eligibility for SBI Take-over of Education Loans

To avail of this scheme, you need to meet the following eligibility criteria:

• Nationality: Indian citizens only.

• Existing Loan: A valid education loan from another bank or financial institution.

• Admission: Enrollment in a recognised institution.

• Co-Borrower: A parent, guardian, or spouse with a stable income.

This complements long-term financial goals, ensuring families can balance education funding with options like a child investment plan.

Documents Required

Applicants must provide the following documents for processing:

1. Original sanction letter and repayment history from the current lender.

2. Admission letter and fee structure.

3. Identity and address proofs.

4. Income proofs of co-borrowers.

5. Academic marksheets and certificates.

Important Terms and Conditions

Before transferring your loan to SBI, here are a few critical terms to know:

1. Loan Amount

   • Studies in India: Up to Rs. 10.00 lakh.

   • Studies Abroad: Up to Rs. 20.00 lakh.

2. Margin Money

   • Up to Rs. 4 lakh: No margin.

   • Above Rs. 4 lakh:

     • Studies in India: 5%.

     • Studies Abroad: 15%.

   • Scholarships and assistantships are included in the margin requirements.

   • Margin contribution may be brought in on a year-to-year basis.

3. Security Requirements

   • Up to Rs. 4 lakh:

     • Co-obligation of parents.

     • No collateral security is required.

   • b) Above Rs. 4 lakh and up to Rs. 7.50 lakh:

     • Co-obligation of parents with a third-party guarantee (waiver possible based on parental net worth).

   • c) Above Rs. 7.50 lakh:

     • Co-obligation of parents.

     • Tangible collateral security of suitable value.

     • Assignment of future income of the student.

     • Joint execution of documents by student and parent/guardian.

4. Processing Charges

   • No processing/upfront charges for educational loans.

   • Loans above Rs. 4 lakh for studies abroad require a Rs. 5000 deposit, adjustable against margin money or interest. Non-availment within 4 months results in forfeiture.

5. Interest Rates

   • For updated rates, visit www.sbi.co.in.

   • 0.50% concession for female students.

   • 1% concession if the entire interest is paid during the moratorium period.

   • Simple interest is charged during the moratorium.

   • Penal interest @2% for overdue loans above Rs. 4 lakh.

6. Loan Disbursement

   • Sanctioned at the branch nearest to the student/parent's residential address.

   • Disbursement in stages based on demand, directly to institutions or vendors.

7. Repayment Terms

   • Moratorium Period: Course duration + 1 year, or 6 months after securing a job (whichever is earlier).

   • Repayment Period: 5-7 years after repayment commencement.

   • Extensions for course completion are allowed up to 2 years in exceptional cases.

   • Interest accrued during the moratorium was added to the principal for EMI calculation.

8. Top-Up Loans

   • Second, loans are permitted for professional courses in India or abroad.

   • Combined repayment begins one year after completing the second course or 6 months after securing a job.

9. Prepayment

   • Prepayment of loans is allowed without penalty.

10. Loan Cancellation

    • Loan cancellation is allowed before disbursement.

    • A processing fee refund is subject to a deduction of administrative charges.

11. Default and Recovery

    • Non-payment may result in legal action and reporting to credit bureaus (CIBIL).

12. Insurance Cover

    • Life insurance cover is recommended for borrowers to safeguard repayment in unforeseen events.

13. Customer Support

    For service-related issues, students can:

    • Call Customer Helpline Numbers.

    • Contact Local Head Offices.

    • Write to the Grievance Cell at Local Head Offices (details on www.sbi.co.in).

    If unresolved, escalate to:

    • Deputy General Manager (Customer Service), Customer Service Dept, SBI, State Bank Bhawan, 4th Floor, Madame Cama Road, Mumbai-400 021. Telephone: (022) 22029456 / 22029451 / 22740432. Email: dgm.customer@sbi.co.in.

14. Disclosures

    • SBI may share loan details with approved credit bureaus without prior notice.

    • SBI is authorised to obtain Credit Information Reports (CIR) from CIBIL and similar agencies.