Federal Bank education loan for abroad studies is available for multiple undergraduate, postgraduate, finance, and diploma/certificate programs in foreign territories. The applicant must have an offer letter in hand from the applied university to secure the education loan. This study abroad education loan is available with and without collateral. The bank offers interest subsidies to female candidates and students who are eligible for the Central Scheme of Interest Subsidy (CSIS) and Padho Pardesh Scheme. Candidates can apply from the official website of the bank or visit the nearest physical branch to initiate the process.
Here is a detailed description of different aspects of Federal Bank education loans for studying abroad. Keep reading to know the application process, applicable interest rates, eligibility, and other relevant information.
Federal Bank Education Loan for Abroad Studies
Federal Bank provides two education loans for students pursuing higher education in foreign nations- Special Vidya Loan Scheme and Fed Scholar Scheme. Both these schemes extend to only professional courses in approved foreign universities. Students opting for Skill Development Courses and Vocational Training cannot apply for this course. The Special Vidya Loan Scheme is applicable to all the approved courses and universities, whereas, the Fed Scholar Scheme only extends to the top universities of the world.
Here are the details of the Federal Bank education loan for abroad studies:
|Maximum Loan Amount with Collateral Security||INR 20 lakh|
|Maximum Loan Amount without Collateral Security||INR 20 lakh|
|Collateral||For loans up to INR 4 lakh: No collateral; For loans between INR 4 lakh to INR 7.5 lakh: A third party guarantee or collateral; For loans above INR 7.5 lakh: Collateral security with prescribed margin|
|Processing Fee||No Charge|
|Margin Money||For loans up to INR 4 lakh: No charge; For amounts more than INR 4 lakh: 15% of the amount exceeding INR 4 lakh|
|Loan Repayment Tenure||5 years to 7 years|
|Processing Time||Not Defined|
|Insurance Cover||Not mandatory|
|Prepayment Fee||No Charge|
Federal Bank education loan for abroad studies interest rate is determined on the base rate of 9.63%. The bank offers a 0.50% rebate on the below-mentioned interest rates to female applicants:
|Loan Amount||Interest Rate|
|Up to INR 4 lakh||13.25%|
|Above INR 4 lakh||14.75%|
The Federal Bank has determined that students going to study abroad must meet the following eligibility criteria to avail of the education loan for abroad studies:
- The applicant must be an Indian National (Indian citizen, Non-Resident Indian (NRI), Overseas Citizen of India (OCI), and Person of Indian Origin (PIO))
- The candidate must have secured admission to a technical or professional course through a selection process for eg; an entrance examination conducted by an accredited or approved institution.
- The student must gain admission on a merit basis.
- The applicant must have a co-borrower or a co-applicant.
Students who have secured admission to the below-listed courses in foreign universities are eligible to apply for a Federal Bank education loan for abroad studies:
- Undergraduate courses: Technical/Professional courses
- Postgraduate courses: MSc, MA, MCA, MBA, MD, etc
- Chartered Institute of Management Accountants (CIMA) courses
- Certified Public Accountants (CPA) courses
- Diplomas and Degree courses such as Pilot training, Shipping, and Aeronautics are offered by recognized regulatory authorities.
An individual planning to carve a future in a foreign country can apply for a Federal Bank education loan for abroad studies through online as well as offline channels. Whichever route you choose, the interest rate, eligibility criteria, and eligible courses remain the same. Choose the channel at your convenience.
Students are advised to follow these steps to avail of a Federal Bank study-abroad education loan:
- Go to the official website of the bank.
- Click on the ‘Forms and Stationery’ option.
- Select the ‘SME Loans Applications and Agreements’ option.
- Download the ‘Application Form PDF’.
- Fill out the ‘Application Form’.
- Upload the mandatory documents along with the completed application form.
- Take a print of the completed form.
- Visit the nearest branch of the Federal bank to complete the education loan formalities.
Students also have the option to initiate all the formalities at the physical branch itself. Candidates can get the application form from the nearest branch of the Federal Bank. Officials in the loan department will guide the students throughout the entire process.
For the successful application for a Federal Bank education loan for abroad studies, a student must produce the following documents online and at the physical branch of the bank:
- Admission Letter/Offer Letter
- Self-attested copies of Address Proof, Date of Birth (DOB), and Age Proof.
- Self-attested copies of all academic mark sheets
- Self-attested passport-size photographs
- Copies of passport and visa required for the abroad course
- Proof of income of the student, if salaried, and of the co-applicant
- Copy of ITR of the candidate, if salaried, and of the co-borrower
- Details of the collateral and government-approved valuation certificate of the collateral security.
Federal Bank education loan for abroad studies covers the following expenses:
- Tuition Fee
- Hostel Fee
- Exam Fee
- Laboratory and Library Fee
- Caution Deposit, Refundable Fee, Maintenance Fee, etc. All these funds must not be greater than 10% of the tuition fee
- Travel Expenses
- Cost of books, uniform, instruments, computer/laptop, lab equipment, etc
- Miscellaneous expenditures like thesis/study tours/project work
The advantages of a study abroad education loan from the Federal Bank are as follows:
- Minimal paperwork
- No loan processing fee
- No age limit
- No prepayment charges
- Availability of interest subsidy schemes: Padho Pardesh Scheme and Central Scheme of Interest Subsidy (CSIS)
- Tax benefit under section 80 (E) of the IT Act of India
- No repayment during the moratorium period
- A concession of 0.50% on Federal Bank education loan for abroad studies interest rates to female students
Ans: Federal Bank provides education loans under Special Vidya Loan Scheme and Fed Scholar Scheme. Both loans are available for students pursuing technical or professional courses in India and abroad.
Ans: A student needs to submit an Admission Letter/Offer Letter, Self-attested copies of Address Proof, Date of Birth (DOB), Age Proof, Mark Sheets, and passport-size photographs; copies of passport and student visa; income proof; and details of the collateral security.
Ans: Students availing loans of up to INR 4 lakh have to pay a 13.25% interest rate, whereas, those with loans above INR 4 lakh need to pay a 14.75% interest rate. Female students get a concession of 0.50% on the interest rate.