“Cent Vidyarthi” is Education Loan offered by Central Bank of India. They want to offer an opportunity to the students in India so that they can pursue higher studies in India and Abroad.
Cent Vidyarthi is a Term Loan. It means you will have to repay the loan amount in a specific time period. Repayment period is upto 10 years for Loan upto Rs.7.50 Lakhs and 15 years for loan above Rs.7.50 Lakh. And, repayment period excludes Course Period and Repayment Holiday or Moratorium Period.
Under Cent Vidyarthi Scheme, you need to start repaying your loan once your Repayment Holiday or Moratorium Period expires. this holiday period is 12 months after completion of studies or 6 months after securing job, whichever is earlier.
Eligibility for Education Loan i.e.Cent Vidyarthi:
- You should be an Indian National.
- Also, you should have secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test or Merit Based Selection process after completion of HSC i.e. 10 plus 2 or equivalent.
- And, where there is no entrance test or merit based selection process; and admission is purely based on the marks scored in qualifying examinations; in such cases, the student should have scored minimum 50% marks in qualifying examination. In addition, 10% relaxation for SC or ST categories.
Expenses considered for Education loan:
- Fee payable to college, school and hostel
- Examination/ Library/ Laboratory fee
- Travel expenses/ passage money for studies abroad
- Insurance premium for student borrower, if applicable
- Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts.
- Purchase of books/ equipment’s/ instruments/ uniforms
- Purchase of computer at reasonable cost, if required for completion of the course
- Any other expense required to complete the course – like study tours, project work, thesis, etc.
- While computing loan required, scholarships, fee waiver etc., if any available to the student borrower may be taken into account
Maximum loan amount:
- Rs. 10 lakh for studies in India.
- Rs. 20 lakh for studies abroad.
- The ceilings fixed for studies in India and abroad correspond to the limits fixed by the RBI for treatment as priority sector lending.
- And, most of all, there is no maximum ceiling if loan amount secured by 100% collateral security.
- Upto Rs. 4 lakhs: NIL,
- In India Above Rs. 4 lakhs: – 5% Margin
- In Abroad Above Rs. 4 lakhs: – 15% Margin
- (Scholarship may be included in margin.)
Rate of Interest:
While, for male students, rate of interest is MCLR + 2.00%; for female students, it’s MCLR + 1.50%. For latest rate of interest, please contact bank.
- Bank may provide 1% concession on interest during the study period, if you have serviced the interest during your study period; and subsequent moratorium period before the repayment starts.
- During your Repayment Holiday / Moratorium Period, Simple Interest is applied. From the due date of first installment, Compound Interest will be applicable.
Fees goes direct to your college / hostel / mess / airlines etc. In appropriate cases disbursement of fees can be made to borrowers subject to satisfactory evidence. You need to submit the original receipts in the bank once you pay the fees to your institution.
Security for Education Loan:
- Upto Rs 4 lakhs : Parent(s)/guardian must have to be the joint borrower(s). You will have to Assign your future income for payment of loan installments; and, since the loan amount is upto 4 lakh, so you don’t have to give any security.
- Above Rs.4 lakhs and upto Rs7.5 lakhs : Here, the Parent(s)/guardian must have to be the joint borrower(s); and you also need to provide a collateral security in the form of suitable third party guarantee. In addition, you will have to assign your future income for payment of installments.
- Above Rs.7.5 lakhs : Parent(s)/guardian must have to be the joint borrower(s). Tangible collateral security of minimum value equivalent to the loan amount and acceptable to bank needs to be provide, along with the assignment of your future income for payment of installments.
You will have to get a Comprehensive life insurance policy. Policy should be equivalent to loan amount, for a minimum period of loan term. Loan term is total of course period, moratorium period and repayment period. Also, you will have to assigned the policy in favor of the Bank.
Central sector interest subsidy scheme:
- The Central Sector Interest Subsidy Scheme of MoHRD is based on ‘IBA Model Educational Loan Scheme’, is applicable only for loans which are sanctioned for Professional and Technical courses (after 12th standard) in India.
- Loans up to Rs.10 lakh also qualify for interest subsidy under Central Sector Interest Subsidy Scheme of MoHRD.
Processing Fees for Education Loan:
- Most of all, there are No processing or upfront charges applicable on loans for studies in India; sanctioned under this scheme.
- For studies abroad, Rs.500/- for loan up to Rs.10 lakh and Rs.1000/- for loan above Rs.10 lakh will be charged while considering the applications but refunded when loan is availed by the student i.e. within 6 months from the date of sanction.
Repayment of Education Loan:
- Repayment will start after 12 months after completion of studies or 6 months after securing job whichever is earlier.
- Maximum repayment period is upto 10 years for loans upto Rs.7.50 lakh
- And, maximum repayment period is upto 15 years for loans above Rs.7.50 lakh. Repayment on EMI basis.