Education Loans help students finance their education in India when the institutes they are aiming for are the likes of Indian Institutes of Management (IIM) which charge exorbitant amount of fees from students for academic preparation in the field of management, while also providing contextual analyses from Stanford, Harvard University, etc. IIM is a leading graduate management school in Asia, with opportune placement packages for its graduates. Given its name and fame, students who do not have the required funds to apply to this esteemed institute can do so by applying for an education loan instead. With beneficial interest rates and expenses covered, an education loan is a path that many take. Read the blog below to know about taking an education loan for IIM.
This Blog Includes:
About Education Loan for IIM Without Collateral
Education loans come in the form of secured and unsecured loans. Taking an education loan without collateral will therefore be under unsecured loans wherein the borrower is not required to pledge collateral. While collateral is a must for a certain amount(s) of loan for many banks such as the ones exceeding INR 10 lakh, other banks also base their collateral requirements on the income of the borrower. While this is true, banks such as the State Bank of India also provide collateral-free education loans. This is for those students who get admission to top B-schools. With the increase in IIM fees by 5%, students are finding it hard to apply to their dream college. But with the aspect of education loans, and especially the ones without collateral, funding management courses at IIM becomes possible.
Benefits and Features of an Education Loan for IIM
IIM students can apply for and obtain education loans worth up to INR 30 lakhs. IIM loans also do not require collateral, though parents of the students are encouraged to act as co-borrowers. Apart from these prominent benefits, the following can also benefit students.
- Students can avail of the student loan tax education under section 80E, wherein they can claim the interest paid on the education loan.
- Moreover, students can easily repay the loan within a period of 15 years
- With admission to a prestigious university such as IIM, students can also avail of low-interest rates on loans as compared to other types of universities.
- Women beneficiaries can claim a 0.5% rate deduction on education loans from banks such as SBI and Bank of Baroda.
- Education loan for IIM also helps cover expenses such as travel, accommodation, equipment, books and stationery fees.
Top Education Loan for IIM by Indian Banks
Now that we have understood the features of an education loan for IIM, what are the banks and their interest rates, along with other factors? Read the table below.
|Name of Bank/Loan||Maximum Amount||Rate of Interest||Security||Repayment Period|
|OBC Customized Education Loan Scheme IIMs||INR 15 lakh||Up to 10.5%||Co-borrowers (parents or guardians)||10 years for Up to INR 7.5 lakh
15 years for more than INR 7.5 lakh
|Special Education Loan Scheme(Union Bank)||INR 30 lakh||8.10%||Co-borrowers (parents or guardians)||15 years|
|Super Premier Educational Loan Scheme (UCO Bank)||INR 30 lakh||8.40%||–||15 years|
|SBI’s Scholar Loan||INR 40 lakh||Up to 10.2%||Co-borrowers (parents or guardians)||15 years|
|Baroda Scholars Scheme||INR 80 lakh||8.885%||Co-borrowers (parents or guardians)||10 to 15 years|
SBI Education Loan Without Collateral
As mentioned SBI is one of the top banks that provides education loans for IIM without collateral for students getting admission to IIM. For type AA colleges, an education loan below INR 40 lakh (the maximum amount) requires absolutely no collateral. Apart from that, for type A and type B colleges, there is a requirement for a co-borrower for a loan amount of more than INR 20 lakh. The maximum amount of loan that one can take for type C colleges is INR 30 lakh but an education loan without collateral is provided for the amount below INR 7.5 lakh.
SBI education loan for IIM without collateral has various salient features including the provision of no processing fees!
Eligibility Criteria for Various Banks
The eligibility criteria depend on various banks, but the bare minimum requirements are mentioned below.
For SBI Scholar Scheme: The student should have secured admission to IIM in a recognised degree programme.
For Baroda Scholars Scheme: The student should be a citizen of India and should be accepted into IIM and enrolled on a recognised course programme.
For Union Bank of India education loan: The student should have been admitted to IIM.
Things to Consider Before Taking an Education Loan for IIM
Finally, once you decide on taking an education loan for IIM, the following are some steps to consider beforehand.
- Compare and analyse the interest rates of different banks offering you the education loan
- Have a thorough read of the terms and conditions of the loan
- Carefully consider the repayment and moratorium period of the education loans before choosing one
- Make sure to use the loan calculator of various banks (such as SBI, Bank of Baroda, and Union Bank of India) available on their website before deciding on their education loan
- Additionally, get to know about the margin amount in education loans of different banks.
An education loan for IIM is a means of financial assistance for students to fund their studies at an Indian Institute of Management.
A student who is a citizen of India and has secured admission to IIM is eligible for the education loan.
Almost 85% of students in the postgraduate programme take an education loan for IIM to fund their degree.