SBI Education Loan Repayment Process

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sbi education loan repaymentThe SBI education loan repayment is the next topic of concern for a lot of students who have already borrowed an SBI education loan to fund their higher studies abroad. The repayment process followed by most government banks, including prominent ones like the SBI, is almost similar. This article will enlighten you about the SBI education loan repayment process for abroad education loans. 

A lot of students who borrow an SBI education loan to fund their higher studies often fail to gather sufficient information about the terms and conditions regarding the SBI education loan repayment process. The SBI education loan repayment terms and conditions discussed in this article will highlight some of the common doubts asked by candidates at all times.

Before diving into the actual process, let us understand the different types of education loans available in India. This information is necessary in order to understand the nature of the SBI education loan repayment process.

A Brief Look At the Education Loan Options in India

It is common knowledge that pursuing a postgraduate or undergraduate course abroad is no cheap affair, especially when it comes to the higher education process of countries like Canada and Germany where students need to arrange funds for their living expenses even before their student visa application is processed. This is the reason why a major percentage of students who aspire to study abroad opt for abroad education loans.

In India, abroad education loans are mainly divided into two categories on the basis of requirement of collateral. Education loans provided by major government banks like the SBI, Bank of Baroda, etc. are granted on the basis of collateral security. The benefits of borrowing an abroad education loan in SBI outnumber those of unsecured education loans which are education loans without collateral, granted by privately run organizations called NBFCs (Non-Banking Finance Companies). This is due to the reason that the SBI education loan eligibility criteria are way more flexible in comparison to those of other lenders in the market. The terms of SBI education loan eligibility criteria are much more student-friendly especially when it comes to co-applicants. Do watch the latest episode of Loanflix on YouTube to understand the various terms of the SBI education loan eligibility criteria for co-applicants.

Due to the different natures of both the education loans, the education loan repayment process followed by both types of organizations are different. The terms and conditions of the SBI education loan process are more or less similar to those of other government banks. So, even if you plan on borrowing a government bank education loan anytime soon, this article may be of help.

If you are already aware of all the SBI education loan repayment terms and conditions but have been facing certain issues in the same, do get in touch with the financial team of WeMakeScholars. The financial team is well-versed in handling some common issues faced by students in their SBI education loan repayment process and hence, they can provide relevant assistance in resolving the same.

The following terms in the SBI education loan repayment process are crucial

  1. Moratorium period
  2. Loan Tenure

abroad education loan

SBI Education Loan Repayment Process: Moratorium Period

The moratorium period is one of the highlights of the education loan procedure in SBI. A moratorium is only applicable to education loans due to the nature of this type of loan. When students borrow an education loan in SBI, or any other similar government banks, they need not begin the loan repayment until after their course period gets over. They are also allowed an extension period of six months to a year, just so they could arrange the sufficient funds to begin their education loan repayment. So does this mean that SBI education loan interest rate will not be charged for this period?

The SBI education loan interest rate is calculated on the basis of simple interest for the entire moratorium period which includes their entire course duration, plus six months/ a year post that. The moratorium period interest rate is applied to the education loan amount which is disbursed from time to time.

For example, if a loan amount of Rs 1 lakh is released at the start and interest rate is 11% per annum, a total interest of Rs 11,000 per annum or Rs 33,000 for a three-year moratorium period will be accumulated

The actual SBI education loan repayment process begins once the moratorium period is over. Students are allowed to make the remaining repayment in easy monthly instalments.

Read More about Documents for Education loan

SBI Education Loan Repayment Process: Loan Tenure

The SBI education loan repayment tenure granted to all types of SBI education loans is more or less the same. Students who borrow an SBI education loan to support their higher studies abroad are granted an SBI loan tenure of 15 years. One of the best parts of borrowing an education loan in SBI is that the SBI education loan rate applied at the time of borrowing the education loan does not change with respect to the changes in its value from time to time. So, for example, if you borrow an SBI education loan in March 2020, you will be repaying the loan on the basis of the SBI education loan rate applicable to the loan in March 2020. The timely changes made to the SBI education loan rate will not affect the education loan rate.

The following table depicts the different SBI education loan tenures and moratorium period granted to students who borrow education loans under the different SBI education loan schemes.

 

SBI Education Loan Scheme SBI Education Loan Repayment Terms
Moratorium Period Loan Tenure
SBI Student Loan Scheme Course period + one year 15 years
SBI Global Ed-Vantage Loan Scheme Course period + one year 15 years
SBI Skill development loan scheme Course duration of up to 1 year: Course duration + 6 months
Course duration above 1 year: Course duration + 1 year
    • Loans up to Rs 50,000
    • Up to 3 years
    • Loans between Rs 50,000 to Rs 1 lakh 
    • Up to 5 years
    • Loans above Rs. 1 lakh Upto 7 years
SBI Education loan for premier institutes Course duration + 1 year 15 years

The financial team of WeMakeScholars has been working in close quarters with SBI with the aim of helping students who wish to pursue their higher studies abroad. A major percentage of students who apply for higher studies abroad are often unaware of smaller aspects of the SBI education loan process. When you apply for an abroad education loan in SBI through WeMakeScholars, the entire process of appying, processing and sanctioning the education loan does not take more than 12 days which is a smaller time period as compared to one month which is the average processing time taken when students directly approach any SBI branch for an education loan.

Read more about Abroad Education Loan for Bachelors Studies- Details to know

SBI Education Loan Interest Subsidy Schemes

All students who borrow an SBI education loan to fund their higher studies are eligible to avail a subsidy under any one of the education loan interest subsidy schemes introduced by the government of India for students who meet the following eligibility criteria.

The government of India had introduced three major education loan interest subsidy schemes for students belonging to certain sections of the society who had borrowed an education loan to fund their higher studies in India, as well as abroad. These education loan interest subsidy schemes are

  1. Central Sector Interest Subsidy Scheme (CSIS)
  2. Padho Pardesh Interest Subsidy Scheme 
  3. Dr. Ambedkar Central Sector Scheme of Interest Subsidy

All the above-mentioned education loan interest rate subsidy schemes allow students to avail an exemption of the moratorium period interest of their SBI education loan repayment. All of the education loan interest subsidy schemes except the CSIS education loan interest subsidy scheme are applicable to SBI education loans borrowed for higher studies abroad.

Only students who borrow government bank education loans of up to INR 20 Lakhs to support their studies abroad or in India are deemed eligible to avail exemption under both the education loan interest subsidy schemes. CSIS subsidy scheme is only applicable to SBI education loans borrowed for higher studies in India.

Students who are likely to qualify for an exemption under any of these schemes are also supposed to meet other requirements as well. Do make it a point to watch the 16th episode of Loanflix on YouTube. This episode clearly explains all the requirements students need to meet in order to qualify for an education loan interest subsidy.

abroad education loan

SBI Education Loan Repayment Process: Miscellaneous terms

SBI education loan prepayment: SBI does not charge students with any penalty if they repay the entire education loan before the tenure ends. 

Till about two years ago, government banks had an education loan repayment support scheme stating that candidates get to avail a 1% rebate on regular payment of full interest during the moratorium period. However, this scheme was called off roughly about a year ago. So if you happen to come across any such terms that mention this scheme, please be aware that no such provision exists! This education loan repayment support scheme is obsolete now. You can now get to know how much amount you are supposed to repay by using the education loan repayment calculator facility available on government banks’ official websites.

The factors mentioned above are extremely crucial to the education loan repayment process of government banks and it will help you in the long run in your education loan process. To know specific details about the education loan process of your lending bank, get in touch with our team by requesting a callback.

Note: WeMakeScholars is an organization funded and supported by the Government of India that focuses on International Education finance. We are associated with 10+ public/Pvt banks/ NBFCs in India and help you get the best abroad education loan matching your profile. As this initiative is under the Digital India campaign, it’s at free of cost. The organization has vast experience dealing with students going to various abroad education destinations like the US, Canada, UK, Australia, Germany, Sweden, Italy, China, France among others

 

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Bibliophile, wanderer, major foodie. I write too :)

 

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