Canara Bank Education Loan

Canara Bank education loans for abroad are offered under two main schemes: IBA Model Education Loan Scheme and 'Education Loan Scheme for Pursuing a Master’s Degree ’. The interest rates for the schemes are 9.25% and 9.50%, respectively. The processing fee for IBA Model and for the 'Education Loan Scheme for Pursuing a Master's Degree’ is 0.5% of the loan amount. Both schemes do not have any prepayment or foreclosure charges, and the repayment tenure is up to 15 years, excluding the moratorium period, which is the course duration plus 1 year. 

In this article, you will find all the details regarding your Canara Bank education loan schemes, their loan amounts, interest rates, collateral requirements, margin, and other details.

IBA Model Education Loan Scheme 

This Canara Bank education loan scheme is designed by the Indian Banks’ Association (IBA) and adopted by Canara Bank. Under this scheme, eligible NRI students with valid passports and Indian students can apply for studies abroad or in India. The maximum loan amounts offered under this scheme are listed below:

Education Loan Scheme for Pursuing Masters Degree

Canara Bank offers this scheme to Indian students planning to pursue post-graduation (masters). This scheme applies to both Indian and top international universities. To qualify for this scheme, the student has to qualify in the entrance exams and get a minimum score of :

• GRE - 300+
• GMAT - 650+

The loan amount under this scheme is decided based on the collateral value. If your collateral value is equal to or more than your total expenditure, then it is considered full collateral. But if the collateral value is less than your total expenditure, then it is considered partial collateral. Here are the Canara Bank education loan details regarding the scheme:

Canara Vidya Turant 

Vidya Turant offers education loans for students who want to pursue their education in India at top institutions of the country. Based on the university category, you can get collateral-free loans up to ₹50 lakh. There is no margin money, processing fee, or foreclosure charges applicable under this scheme. The Canara Bank education loan interest rate ranges from 8% to 8.60% depending on whether you apply with a co-applicant. The required eligibility criteria are that the applicant should be Indian and should have qualified for an entrance exam conducted by the competent authorities.

IBA Model Education Loan

Under the IBA Model Education Loan Scheme, you can get education loans for in-land studies as well; the interest rates, acceptable collaterals, loan amount, and other details remain the same for both abroad and Indian loans. The only two differential factors are the margin money and eligible courses. For Indian education loans, the margin money is 5%, and eligible courses are undergraduate and postgraduate courses offered by reputed institutions such as IIMs and IITs.

The Canara Bank education loan interest rates start from as low as 9.25% under the IBA Model Education Loan Scheme. You can get both secured and unsecured loans from Canara Bank. The final interest rate for Canara Bank is decided based on the collateral value, profile of the applicant, university of choice, and other factors. Here are the interest rates for the abroad schemes. 

To learn more about how your interest rate is calculated and what decides your final interest rate, you can read the Canara Bank education loan interest rate page. 

Margin Money Requirement

Margin money for an education loan refers to the share of your total expenditure that you are asked to pay out of pocket. This is usually a very small portion of your total expenditure that you pay to the bank, after which the bank disburses the incurred expenditure in full. Note that this isn't any fee or charge that you are paying to the bank; instead, it is a portion of your cost of education. Margin money for an education loan is usually paid during every disbursement, but with Canara Bank you can pay your margin money on a year-on-year basis. Here is a breakdown of margin money for Canara Bank's abroad education loan scheme.

Expenses Covered

It is always important to know all the expenditures covered under your education loans to make sure you don't end up paying for something out of your pocket. Here is a detailed list of expenditures covered under your education loan.

Loans Without Collateral

You can get education loans from Canara Bank without collateral under the IBA Model Education Loan Scheme. The maximum loan amount under this scheme is up to ₹7.5 lakh. This is offered under the Credit Guarantee Fund Scheme for Education Loan (CGFSEL). This government initiative comes with 75% default coverage, meaning if the borrower defaults on the education loan, the government pays 75% of the defaulted amount to the lending bank. The remaining 25% is borne by the bank. This scheme focuses on providing support to meritorious students who find it difficult to arrange for collateral or are coming from economically weaker sections. 

Accepted Collateral 

Every bank has a list of acceptable collateral; in the case of Canara Bank, the list of acceptable collateral is as follows:

1. Land

2. Flat / House / Bungalow

3. Fixed deposit (only Canara Bank FDs are accepted)

4. Government bonds

5. Commercial properties (shops and showrooms)

Collateral Margin

Collateral margin is the minimum value of the asset you must pledge to the bank, expressed as a percentage of your loan amount. It depends on the asset type. For example, if Asha wants a ₹1 crore loan and pledges a residential property, the property should be worth at least ₹1.25 crore (125% of the loan amount/total expenditure).

Note: collateral margin is different from margin money. Margin money is the share of your expenses you pay yourself, while collateral margin is how much security the bank needs against your loan.

1. Fixed Deposit- 100% (Full value is considered)

2. Residential Property- 125% to 150%

3. Commercial Property- 125%

4. Non-Agricultural Land- 125%

5. Government Bonds- 125%

Understanding the Canara Bank education loan eligibility is very important for the applicant to make sure the application process isn't delayed or rejected by the bank. 

Student Eligibility Criteria

Student eligibility criteria for a Canara Bank education loan are very simple; the only primary requirement is that the student has to be an Indian citizen with a valid passport. In the case of the IBA Model Education Loan Scheme, Non-Resident Indians (NRIs) are also accepted along with Indian residents.

Eligible Courses and Institutions

Canara Bank has a set list of acceptable courses in the case of the IBA Model Education Loan Scheme for studies abroad. The acceptable courses are undergraduate, post-graduate, PhD, post-graduate diploma, etc. For the Education Loan Scheme for Pursuing Masters Degree, there is no list of eligible courses.

In this, you will understand the list of documents required for an education loan in Canara Bank

Student, Co-Applicant, and Income Documents

Collateral Documents

Property documents for residential and commercial properties: 

1. Sale agreement/Chain agreement,

2. Occupancy Certificate (OC), Commencement Certificate (CC), or sanctioned plan approval,

3. Latest maintenance bill or receipt copy,

4. Utility bill of the property

For liquid securities such as fixed deposits, the principal value certificate and policy papers are enough. 

Here is a list of all the charges levied by Canara Bank:

Here is how to apply for an education loan in Canara Bank:

Canara Bank Education Loan Application Process via Bank

You can start by visiting the Canara Bank education loan page, after which you have to select the scheme under which you plan to apply. 

In the top right-hand corner, you will find the ‘Apply Now’ option; once you click on it, you have to fill out a form and submit all the required details.

After attaching your documents, you can submit the application, after which the bank executive will contact you to process your application further and check your Canara Bank education loan eligibility. 

Canara Bank Education Loan Through WeMakeScholars

Application process via WeMakeScholars:

1. Visit the WeMakeScholars website.

2. Click on the ‘Check Eligibility’ form.

3. Fill out the form and submit it. 

Soon, a financial officer will connect with you and tailor the best plan for you based on your needs and profile. 

Benefits of applying through WeMakeScholars: 

WeMakeScholars is an organisation created with the sole purpose of supporting students pursuing their higher education abroad. Here are some of the key benefits of WeMakeScholars.

• Lower Interest Rates: Processing via WeMakeScholars can get you interest rates up to 2% lower than applying directly with a bank.

• Faster Loan Process: Loans processed under WeMakeScholars are sanctioned within days, saving weeks for students.

• End-to-End Support: From checking your eligibility with various banks to providing post-loan sanction support, WeMakeScholars supports you throughout the entire loan process. 

• Cashback: Students processing their education loan via WeMakeScholars receive a cashback of up to ₹3,000 on their first disbursement. 

Processing Time

Processing time refers to the time taken by the bank to process your application after all your required information and documents are submitted. This is the time between application completion and sanction. The processing times for Canara Bank and for WeMakeScholars are listed below.

Moratorium Period

The education loan moratorium period is also known as a grace period or repayment holiday, during which the student does not have to pay any EMI. During this period, simple interest is calculated on your disbursed amount; interest payment during this period is optional. The moratorium tenure offered by Canara Bank is the course duration plus 1 year after your course completion. 

Repayment Tenure and EMI

Education loan repayment tenure refers to the period after your moratorium period; during this period, your repayment journey starts, your Equated Monthly Instalments (EMIs) are calculated, and you are asked to pay them until the loan amount is cleared. Repayment tenure is a crucial part of your loan process; hence, all the loan repayment terms are decided beforehand. 

The repayment tenure offered by Canara Bank is up to 15 years (excluding the moratorium period).

How to Repay: Net Banking and Auto-Debit

Understanding repayment methods is an important way to make sure you don't default by mistake. Here are some of the popular ways to repay your education loan. 

1. Auto-Debit 

In this method, you ask the bank to set up an auto-debit mandate on your savings or current account. This enables the bank to auto-debit your EMI on a set date.

2. Online Loan Payment 

Online payments make it easy to pay your EMI through net banking, UPI, or debit card; you can pay your EMI faster and hassle-free. 

Prepayment and Foreclosure Charges

Prepayment is divided into two types: Part prepayment (partial prepayment) and foreclosure (full prepayment). In part prepayment, you pay a lump sum amount over your EMI, which goes directly towards your principal amount. In foreclosure, you close the loan before the repayment tenure ends; you pay off the entire loan amount and close your loan account. In both cases, banks lose future interest income; hence, they tend to levy a penalty. But in the case of Canara Bank, there are no education loan prepayment or foreclosure penalties. 

EMI Calculator 

EMI example 1: IBA Model Education Loan (Unsecured), Interest paid during moratorium.

Note: 

1. Assume that interest is paid monthly during the moratorium, so the principal stays the same at ₹7,50,000.

2. Assume the full loan is disbursed at the start. Banks usually disburse in stages, so the actual interest will be much lower.

3. EMIs are calculated on the reducing balance method over 15 years.

EMI example 2: Education Loan Scheme for Pursuing Masters Degree (full collateral), interest not paid during moratorium 

Note:

1. Assume that the interest is not paid during the moratorium. It accrues as simple interest and is added to the principal before EMIs start.

2. EMIs are calculated on the reducing balance method over 15 years.

EMI example 3: IBA Model Education Loan Scheme (secured), interest paid during moratorium 

Note:

1. Assume that interest is paid monthly during the moratorium, so the principal stays the same at ₹25,00,000

2. Collateral is required for loans above ₹7.5L under the IBA Model Education Loan Scheme.

3. EMIs are calculated on the reducing balance method over 15 years.

Common Note : 

1. Paying interest during the moratorium period is optional. It keeps your principal and EMI lower, while not paying it increases your total interest cost. 

2. These are sample calculations only. Your actual EMI depends on your loan amount, interest rate, disbursement schedule, and the bank’s terms. 

You can use the Canara Bank education loan EMI calculator to find the EMI and interest rate for your loan.

Disclaimer: Figures shown are illustrative examples only. Actual figures may vary based on applicable loan terms and conditions. 

*The interest rates mentioned are indicative and subject to change. The final interest rate also depends on individual profiles and the bank’s discretion.

Canara Bank education loans for studying abroad start at 9.25% for the IBA Model Education Loan Scheme and 9.50% for the Education Loan Scheme for Pursuing Masters Degree. Applicants can get a maximum of ₹7.5L, collateral-free under CGFSEL, and for higher loan amounts, collateral is mandatory. Canara Bank does not levy any prepayment or foreclosure charges, making it easier for applicants to preclose the loan. The repayment tenure offered by Canara Bank is 15 years, and the moratorium period is the course duration plus 1 year.