Federal Bank Education Loan Rate of Interest
Loan scheme is extended for only professional courses and doesn't cover Vocational Training and Skill Development courses
- Zero margins for loan amount up to INR 4 Lacs
- 0.50% rebate in the rate of interest for female applicants
- Zero processing fee (in India)
- The loan is sanctioned co-jointly to the applicants and their guardians
Rate of Interest charged by Federal Bank depends on the base rate of 9.63%
- For Loan amount up to INR 4 Lacs is 13.25%
- For Loan amount above INR 4 Lacs 14.75%
- 0.50% concession to girl students
CALCULATE YOUR EDUCATION LOAN EMI
1,000 per month
1,000
1,000
Looking for admission for India and Abroad?
Federal Bank Education Loan Eligibility
- Indian National. Applicant must be an Indian National
- Eligible course. Candidates should have secured admission to Professional/ Technical courses through Entrance test or any other selection process from a recognized or approved university
- Entrance Test/ Merit based. Student must have secured admission through entrance exam or on merit basis
- Co-signer. Students seeking education loan from Federal Bank must have a co-signer to act as a co-borrower
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| Bank / Financer |  Change bank |  Change bank |  Change bank |  Change bank |  Change bank |
| Applicable Rate of Interest | Up to INR 4 Lacs: 13.25% Above INR 4 Lacs 14.75% | Up to INR 7.50 Lacs: 10.55% Above INR 7.50 Lacs: 10.80% | up to INR 7.5 Lacs: MCLR + 2.00% above INR 7.5 Lacs: 2.60% | Upto 4 Lacs- 16.50% Upto 7.5 Lacs- 17.50% Above 7.5 Lacs- 15.50% | |
| Max Loan with Collateral | For India _ INR 10 Lacs For Abroad _ INR 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs and beyond based requirement | |
| Max loan without collateral | For India _ INR 10 Lacs For Abroad _ INR 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs and beyond based requirement | |
| Processing Fee | Nil | Up to INR 4 Lacs: Nil Above INR 4 Lacs: INR 5000 | Nil | Nil | |
| Repayment Period | 5-7 years | 15 years | 15 years | 7 years | |
| Loan for top institutions | Yes, Fed Scholar Loan Scheme | Yes, SBI Scholar Loan Scheme | Yes, PNB Pratibha | No | |
| Margin | For loan amount upto INR 4 Lacs: Nil Above 4 Lacs: For India- 5% and For Abroad- 15% | For loan above INR 4 Lacs In India: 5% In abroad: 15% | Up to INR 4 Lacs - NIL Above INR 4 Lacs - 5% | Upto loan 4 Lacs: No margin Above 4 Lacs: for India: 5% for Abroad: 15% | |
| Age Limit | No age limit | no age limit | No age limit | No | |
| Loan Security | Up to INR 4 Lacs _ No Security From INR 4 to 7.50 Lacs - Third Party Guarantee/ Collateral Security Above INR 7.50 Lacs - Collateral security with stipulated margin | Upto 7.50 Lacs: Only Parent/ Guardian as co-borrower. No Collateral Security or third party guarantee Above INR 7.50 Lacs: Tangible security along with parents as co borrower | Upto INR 7.50 Lacs: Parent(s)/guardian be made joint borrower (s). No tangible Security and /or 3rd party guarantee is required. Above INR 7.50 Lacs: Parent(s)/guardian be joint borrower(s). Tangible collateral security of suitable value acceptable to bank. | Third party guarantee Collateral security Additionally, assignment of LIC policy in favor of bank amounting 100% of education loan amount Assignment of Future salaries in favor of Axis Bank | |
| Eligibility concession for SC/ST | No | No | 50% for SC/ST, and;60% for General category. | No | |
| Processing Time | N.A. | 20 days | 15 days | 14 Days | |
| Prepayment charges | Nil | Nil | Nil | Nil | |
| Penal charges | Nil | Penal interest @ 2% to be charged for loans above Rs.4 lacs for the overdue amount and overdue period | Nil | @ 2% per month on the overdue installment/s | |
| Mandatory insurance cover | Not mandatory | Yes | yes | yes | |
| Travel expeneses | Yes | yes | yes | yes | |
| Bank transfter allowance | No | available | available | No such clause mentioned | |
| Top up loan availability | No | yes | available | unavailable | |
| Interest Subsidy Schemes | CSIS Skill Loan Scheme Padho Pardesh | Padho Pardesh CSIS Skill Loan Scheme | Padho Pardesh CSIS Skill Loan Scheme | CSIS | |
| Tax benifit | yes | yes | yes | yes | |
| Concession/benefits | Minimal paperwork No repayment during Moratorium period Repayment can be made in easy EMIs | Concession to girl students 1% concession if interest is serviced during moratorium period including course period | 0.5% concession to girl students 0.5% concession if interest is serviced during moratorium period including course period Online application | There is no processing fee charged No pre- payment charges are applied No pre- closure charges are applied Loan Disbursal period is 15 working days from the date of final submission of documents |
How to apply for Federal Bank Education Loan ?
Federal Bank Education loan application form can be available online or offline at Bank branches.
Visit the official website of Federal Bank
Select Forms and Stationery and then click on SME Loans Applications and Agreements
Download the pdf file and Fill out the form with essential details.
Upload the mandatory documents required.
Submit the form and take out a copy of the application.
Visit Federal bank's branch for further formalities.
Applicants can directly visit the nearest branch and ask for an application form. The bank representative will then guide them with all the necessary information regarding eligibility, documents required and also which loan is best suitable.
Federal Bank Education Loan Details
For Abroad-INR 20 Lacs
Above 4 Lacs: For India- 5% and For Abroad- 15%
From INR 4 to 7.50 Lacs - Third Party Guarantee/ Collateral Security
Above INR 7.50 Lacs - Collateral security with stipulated margin
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Expenses covered under Federal Bank Student Loan Scheme
- Tuition Fee
- Examination fee
- Library/ Laboratory fee
- Hostel fee
- Cost of books, equipment, instruments, uniform, travel expenses, computer etc.
- Miscellaneous expenses such as project work/ study tours/ thesis etc.
- Caution deposit, amount payable towards building fund, refundable deposit etc. but it cannot exceed 10% of the tuition fee
Courses Covered Under Federal Bank Student Loan Scheme
In India
Graduate/ postgraduate degree/ diploma courses conducted by renowned institutions/ universities recognized by UGC, Government, AICTE, AIBMS or ICMR.
Academic courses such as CA, CFA, and ICWAI.
Courses conducted by NIFT, IITs, IIMs, XLRI, IISc, and NID.
Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping (only if it is pursued in India).
Courses for noble cause such as teaching training (like B.Ed.), nursing courses, and from other training institutions approved by Central Government or by State Government
Reputed foreign universities offering approved courses offered in India.
Courses Covered Under Federal Bank Student Loan Scheme
In Abroad
Job Oriented Professional and technical courses
Post-graduation courses such as MBA/ MCA
Courses that are offered by CIMA, London and CPA, USA
Pilot Training, Shipping, aeronautical etc. courses that lead to a diploma or degree
Education Loan Documents Required ?
Admission letter with all essential details
Attested copies of age proof, residence proof and birth date
Self-attested passport size photograph
Copies of qualifying courses
Income proof and/or copy of income tax return file
Details of collateral security along with government approved valuation certificate (if any)
Bank account statement of the applicant.
Copy of passport and visa for abroad courses
Interest Subsidy Schemes
Central Scheme of Interest Subsidy (CSIS)
Formulated by the Govt. of India, a scheme to assist the students belonging to the economically weaker section.
Skill Loan Scheme
The bank offers Skill Loan Scheme for students who aspire to gain knowledge and specialized training in one specific field.
Padho Pardesh
Formulated under the Prime Minister's 15 point programme, this subsidy scheme benefits the students of the minority community who want to study abroad. Such students are provided 100% interest subsidy.
Frequently Asked Questions
What schemes does Federal Bank considers for its education loans?
+ -There is one scheme offered by Federal Bank apart from the basic education loan.
It is CSIS Scheme. The central government interest subsidy scheme is for economically weaker sections.
In whose name is the loan granted?
+ -The loan is granted in the name of the student
What is the age limit for availing loan in Federal Bank?
+ -There is no restriction on age. Student must clear the other eligibility criteria’s stated by the bank for general education loan schemes. For Federal Career Solution Loan the age limit is minimum 18 years and maximum 45 years
What does margin on any loan mean?
+ -Margin amount is the amount that a borrower has to pay through his/ her own sources in form of a down payment as his/ her contribution towards the education.
Where can I avail Federal Bank Education Loan?
+ -You can either contact your nearest branch for the application form or details regarding the loan or apply online.
Is there any provision to apply for loan online?
+ -Yes, you can apply online through Vidyalakshmi portal to avail for this loan.
Is there any minimum aggregate marks to meet the eligibility criteria to avail Federal Bank education loan?
+ -Yes, a student must have secured a minimum aggregate of 50% marks in their last qualifying examination (10+2 or Graduation)
What is the discount/ rebate offered by Federal bank?
+ -- 0.50% concession is given to girl students
- 1% concession if interest is serviced during moratorium period
- 1% concession if you have secured admission to premier institutes
What all is included in tangible collateral security?
+ -Mostly Federal bank asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Federal Bank. Tangible security includes documents related to land/ building/ government security/ public sector bonds/ units of UTI, NSC, Life insurance policy/ bank deposits/ shares or debentures.The value of the security should be equal to the education loan amount.
Is scholarship or assistantship included in the margin?
+ -Yes any scholarship or assistantship will be a part of margin charged on education loan.
What is Moratorium Period?
+ -Course Period plus one year, or six months after getting a job
What is tenure of an education loan?
+ -Tenure of education loan provided by Federal Bank is 7 years
What does MCLR stands for?
+ -MCLR stands for Marginal Cost of funds based Lending Rate. It refers to the minimum interest rate of bank below which it cannot lend.
What all expenses are covered under this course?
+ -Expenses covered by Federal Bank education loan are:
- Tuition/ college/ hostel fee
- Examination/ lab/ library fee
- Books/ uniform/ instruments
- Caution deposit
- Passage money for studies abroad, etc.
Will my travel expense will be covered if I take loan from Federal Bank?
+ -Yes, travel expenses are covered under this loan
I have taken admission through management quota. Am I eligible?
+ -Yes, even if you have taken admission through management quota, you are eligible for education loan by Federal bank
What do you mean by reputed or recognized institutes?
+ -Institutes that are affiliated to state/ central universities and comes under UGC or AICTE are considered as recognized institutes. Reputed institutes are those which are well known and have standard course of repute. More often, banks provide the list of institutes they consider for loan. (You can contact nearest branch for the same)
Are there any special benefits if I have secured admission to one of the top premier institutes?
+ -Federal Bank provides 1% concession to students securing admission to top premier institutes.
What is the processing fee or prepayment charges?
+ -The education loan offered by Federal Bank does not carry any processing fee or any other charges
What are the charges for late payment of EMI?
+ -Federal Bank charges a penal interest @24% per annum, that is, @2% per month.
Will cost of my computer be covered under the loan sanctioned?
+ -Reasonable cost for the computer or laptop well be covered under the loan if it is required to complete the course.
Why is Pan Card necessary?
+ -Pan Card is one of the mandatory document required by banks these days. It is mandatory because:
- Easy to assess Income
- Easy to trace borrowers
Are diploma or certificate courses considered under Federal Bank education Loan (both for India and Abroad)?
+ -Yes diploma or certificate courses are eligible under Federal Bank Education Loan. Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping
Is a co-borrower necessary for loan?
+ -Yes, it is mandatory to have a co-borrower to avail loan from Federal bank.
Who can be my co-borrower?
+ -Your parent/ spouse/ guardian can be a co-borrower. A co-borrower should be your immediate family member, should have a steady source of income, and a good credit history.
What all documents are required from the co-borrower?
+ -Documents required from the co-borrower are:
- Attested copies of age proof, residence proof and birth date.
- Self-attested passport size photograph
- Income proof and/or copy of income tax return file
- Details of collateral security along with government approved valuation certificate (if any).
What is the KYC requirement in education loan?
+ -KYC requirements are the documents as a proof of personal identification and residence proof of the applicant as well as the co-borrower.
What are maximum term for repayment?
+ -Maximum term for repayment is 7 years
How can I repay the loan?
+ -You can repay the loan after the moratorium period by mode of EMI or through post- dated cheques.
What is EMI? How are they calculated?
+ -EMI stands for Equated Monthly Installments. It can be calculated by using the formula given below
EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1]
Here, P is Amount of Education Loan, R is Rate of Interest, n is Tenure of the Loan.
Or simply you can use the EMI calculator provision available on Federal Bank’s official website.
Is the loan disbursed in name of individual applicant or to the institute/ university directly?
+ -The loan is disbursed directly to the institute/ university that you have taken admission to. Hence, an applicant is supposed to submit institute brochure with proper division of the fee
If I am unable to complete my course in given tenure, will my repayment term be extended?
+ -It is completely on the banks discretion to extend the moratorium period or not. You can contact your nearest branch for the same.
What is method of application of interest on education loan?
+ -The interest will be charged at simple rate from the date of disbursement till commencement of repayment of loan. After that, compound interest is charged on reducing balance.
What is interest rate of education loan?
+ -The interest rate is different for different category of Institutes. Refer the table below:
1. Federal Special Vidya Loan
| Loan Type | Loan Amount | Interest Rates |
|---|---|---|
| Special Vidya Loan | Upto INR 4 Lacs | 13.25% |
| Above INR 4 Lacs | 14.75% | |
| Special Vidya Loan Scheme for girl students | Upto INR 4 Lacs | 12.75% |
| Above INR 4 Lacs | 14.25% |
2. Fed Scholar Loan and Federal Career Solution Loan
| For Girl Students | One Year MCLR + 1.70% to One Year MCLR + 6.10% - 0.50% |
| For Other Students | One Year MCLR + 1.70% to One Year MCLR + 6.10% |
What is interest subsidy on education loan?
+ -Federal Bank offers CSIS Interest Subsidy Scheme initiated by government of India. The scheme is for Economically Weaker Sections (EWS) of the society, to promote education amongst them.
What documents do I need to submit to avail interest subsidy scheme?
+ -The documents that need to be submitted are:
- Income certificate issued by authorised authorities
- Bonafide student certificate
- Letter of undertaking or declaration signed by borrower/ co-borrower
If I am availing loan for overseas studies, can I also avail interest subsidy scheme?
+ -No, the interest subsidy scheme is available only for studies applying for studies in India.
What is employment verification in an education loan?
+ -The bank takes the responsibility to cross verify all the employment details of the applicant and co-borrower. If the banks fails to cross verify every detail provided, it might reject the loan application.
Are there any tax benefits in education loans?
+ -Under Section 80E of Income Tax Act, loan borrowers can avail the tax benefits. This benefit is only available over and above INR 1,50,000. Tax benefits can be availed once the borrower starts paying interest on loan. The deduction is available until borrower pays off full interest amount on loan or for maximum of 8 years (whichever is earlier). You can visit the official website of Federal Bank to calculate your tax benefit through their tax benefit calculator.
Is it necessary to have bank account with the bank while availing loan from that particular bank?
+ -It is not necessary to have a bank account while availing the loan but it makes it easier for the borrower to get loan application approved.
Can I repay my loan in foreign currency even if my bank is in India?
+ -Yes, you can pay the amount in foreign currency (Euro, Pound, Dollar, etc.) The bank might charge an additional currency conversion fee as per RBI regulations.
Why do banks require insurance policy as security?
+ -The banks require insurance policy as security in lieu of education loan provided. The insurance policy should be equal or more to the amount of loan sanctioned. In case of untimely demise of the borrower, the bank recovers the amount from the insurance policy
Are there any additional benefits on availing loan from Federal Bank?
+ -There are no such additional benefits on availing loan from Federal Bank. Though, there are no processing or pre-payment charges applied by bank on education loan.
What is credit score? Is it important for education loan?
+ -Credit Score is inclusive of various factors such as credit history (Loan history or credit card). If a student does not have a credit score, banks calculate it by considering factors such as University, College and the Course of admission. Banks consider the academic background of student and credit history of co-borrower.
Are NRIs eligible for the education loan?
+ -NRIs are eligible for the loan if they have Indian citizenship and are Indian passport holder.
Is Visa a necessary document for studying abroad?
+ -Visa is needed as a document proof but it is not a sole requirement.
What do all procedures one have to go through while applying for abroad?
+ -A student who is applying for studying abroad have to give necessary documents required by the bank. One needs to have a thorough knowledge of the course they are applying for and in which institute as it can be asked on the airport by the foreign officials.
If a student has any query, where or whom to contact?
+ -The student can reach out to the nearest branch in case of any query.
Customer Care Number: 1800 - 425 1199/ 1800 - 420 - 1199
Customer Care Id: contact@federalbank.co.in
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