Education Loan Policy | TSCAB
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Education Loan Policy

1 Eligibility:

  • For School/College Education in India or abroad the student should have secured First Division or Second Division (minimum 50% of marks) in the qualifying examination.
    For Technical/Professional/Specialized/Post Graduation studies in India or abroad, the student should have secured admission.
  • Parents/guardian having independent and regular sources of income, traders, self-employed, professionals and persons engaged in agriculture/ allied activities are eligible for availing loan under this scheme. Loans are advanced in joint names of student and parent/ guardian.
2 Eligible Courses:

  • All courses conducted by UGC upto Universities and Autonomous Institutions affiliated to them.
  • Technical/Professional higher studies abroad in recognized Institutes/Universities.
3 Amount of Loan:

  • For School/College education in India or abroad upto (10) times the net monthly income (take home pay) of Parent/Guardian/Student. Minimum loan is Rs.50,000/- and maximum is Rs.4.00 lakhs.
  • For technical/professional/specialized post-graduation studies in India or abroad, 90% of the cost of study or 75% of the value of collateral security as valued by empanelled valuer, whichever is less, subject to a maximum of Rs.10.00 lakhs for studies in India and Rs.20.00 lakhs for studies abroad.
  • 3)The independent income of both the parents and other near blood relation will be included for arriving at the eligible loan amount provided they stand as Co-obligants for the loan. Even if one of the parents do not have any independent income also they should stand as Co-obligants, where property is offered as collateral security, even in case the property is in the name of one of the parents.
4 Margin:

  • 10% of the cost of course shall be borne by the applicant/parents/guardian.
5 Rate of Interest:

  • Interest will be charged @ 12.50% p.a. for loans without any collateral security and @12.00% p.a. with collateral security at monthly rests. Interest should not be capitalized, but kept separately. Capitalization starts from the following month of end of scheduled duration of the course + 1 year (or) 6 months after getting job, whichever is earlier.
  • Fixed rate of Interest is charged and subject to change from time to time by the Bank.
  • Penal interest at 2% over and above the normal interest will be charged on the defaulted amount.
  • Staff will be given 1% concession in applicable rate of interest for educational loans sanctioned for study of their children, as per wage revision agreement dt:30-12-2015 entered into between the Bank and the Employees’ Association/Union.
6 Disbursement of the Loan:

  • For studies in India, semester-wise/year-wise disbursement as per the invoice provided by the relative Institute and as per the existing norms.By way of DD to the Institute for semester fee for studies in India. Living expenses and airfare may be disbursed by way of credit to SB account.
  • For studies abroad:
    By way of credit to SB account. However, sufficient proof of payment of fee, living expenses, airfare etc., made through banks dealing in foreign exchange must be given, failing which loan already disbursed will be recalled, besides stoppage of release of further disbursements. (or)
    By way of tie-up arrangement with other Banks dealing in foreign exchange, as decided by the Bank from time to time (conversion charges for foreign exchange applicable).
  • Disbursement of the fee already paid by the applicant will be made only within three months from the date of payment of fee by the borrower.For second and subsequent semesters demand notice for fee along with student’s record of completion of first year should be furnished. Bank can exercise its discretion to stop the disbursement, if performance of the student is not satisfactory. The yardstick for the performance is the marks scored by the student in the preceding semester or year.
  • CIBIL score of the Borrower and Co-obligants should be recorded and minimum score should be 700. The Managing Director may relax CIBIL score on case to case basis depending upon merits of the case.
7 Securities:

    Upto Rs.4.00 lakhs

    Rs.4.00 lakhs to Rs.10.00 lakhs

    A)One (1) surety (Govt. Employee) * with minimum left over service of 5years (or)
    B)If collateral security of immovable property to the extent of 100% of loan amount under HMDA limit is provided then rate of interest is reduced by 0.5%

    Collateral security of immovable property to the extent of 100% of loan amount under HMDA limits & Nagar Panchayats.

    Above Rs.10.00 lakhs One (1) surety (must be a Govt. employee) with minimum left over service of 5 years and immovable property as collateral security to the extent of 100% of loan amount under HMDA limits & Nagar Panchayats. Co-obligant, who is offering collateral security (in case offered by other than the parents) must be a blood relation to the applicant or parents.
    NSC or KVP or Term Deposit Receipts invested to the extent of 100% of the loan amount duly discharged and lien marked.
8 Processing Fee:

  • The legal scrutiny/valuation/physical verification of the property offered as security will be done by the Bank as per the rules in force from time to time. The costs of such scrutiny/valuation shall be borne by the borrower.
  • Further, the borrower has to pay the processing fee of the loan amount as follows:1% of the loan amount, subject to a maximum of Rs.10,000/- (+) service tax as applicable.

    *Staff will be given 50% of concession in Processing fee.

    Legal and Valuer Fee:
    Borrower has to bear cost of stamping on memorandum of deposit of title deeds plus notification charges and E.C. Charges, as per rules in force.

    Advocate fee: Rs.2,500/-
    Valuer’s fee: Rs.2,500/-

9 Repayment Period:

  • For School/ Junior College Education:Loans to be repaid in 36 months commencing immediately after disbursement, by parent/guardian.
  • For Technical/Professional/Higher Studies in India:
    The loan repayment shall commence after the scheduled duration of actual course period + 1year or 6 months after getting job, whichever is earlier. The maximum repayment period is 60 monthly installments (5 years).
  • For Technical/Professional/Higher Studies at Abroad:
    The loan repayment shall commence after the scheduled duration of actual course period + 1year or 6 months after getting job, whichever is earlier. The maximum repayment period is 60 monthly installments (5 years).
  • d.The borrower/parent/guarantor shall furnish to the Bank 5 post-dated cheques and one cancelled cheque.
  • The bank reserves itself the right to de-sanction or recall the entire loan outstanding in one lump sum as and when the repayment performance is not satisfactory or the certificates/ documents/fee receipts/ quotations etc., produced are found to be false/defective. Such borrowers/sureties/ introducers shall also be liable for civil/criminal action.
11 For Staff:

  • Loans can also be sanctioned to our staff members who are having a minimum leftover service of 5 years on the same terms and conditions.
12 Identity Proofs:

  • All the members, the student and the Co-borrowers or guarantors shall comply with the KYC norms.
13 Sanctioning authority:

  • Upto Rs. 4.00lakhs Branch Manager
    Above Rs. 4.00lakhs and upto Rs. 10.00lakhs DGM(CLPC)
    Above Rs. 10.00 lakhs SOG.