Central Bank of India Education Loan

Central Bank of India is one of the leading public sector banks in India that offers a range of education loan schemes to students who wish to pursue higher education in India and abroad. The bank offers loans for various courses such as undergraduate, postgraduate, vocational education, and training courses.
In this article, we will discuss the various education loan schemes offered by the Central Bank of India, their eligibility criteria, loan amounts, expenses covered, margin, insurance coverage, repayment, processing fee, and interest rate concession.

Central Bank of India offers diverse loan schemes financing various higher education courses ranging from PG to skill enhancement course certifications. With loan amounts ranging from 1.5 Lakhs to 40 Lakhs depending on the applicant’s profile with interest rates starting from 7.95%

1. Central Bank of India Cent Vidyarthi
2. Central Bank of India education loan to executives for pursuing MBA from IIMs and other premier management institutes
3. Education Loan to Students for pursuing MBA from IIMs & other premier management institutes
4. Central Bank of India skill loan

The Central Bank of India offers a specialized education loan scheme tailored to provide financial assistance to executives aspiring to pursue an MBA from top management institutes such as the Indian Institutes of Management (IIMs) and other premier B-Schools in India and abroad. This loan aims to support the academic pursuits of executives and help them achieve their career advancement goals.

Eligibility: To be eligible for this loan, the applicant must be an executive with a minimum of 2 years of work experience, demonstrating a strong professional background and a commitment to career advancement through higher education. 
Additionally, the applicant must have secured admission to a full-time MBA program at a premier management institute in India or abroad.

Loan Amounts: The loan provides a maximum amount of up to Rs. 40 lakhs, enabling executives to cover the substantial expenses associated with pursuing an MBA from renowned business schools

Borrower/Joint Borrower: The loan is sanctioned in the individual name of the student. However, to strengthen the application, parents, guardian, spouse, or parents-in-law of the student may also be taken as joint-borrowers.

Margin: The loan does not require any margin, ensuring that the entire cost of education is financed by the bank.

Security: This loan does not mandate collateral security or a third-party guarantee. Instead, the bank may require the assignment of the future income of the student, providing a structured repayment mechanism.

Insurance Requirement: The scheme necessitates a comprehensive life insurance policy for the student availing the educational loan. The coverage amount should be a minimum of the loan amount for the entire duration of the loan term, including the course period, moratorium period, and the subsequent repayment period.

Interest Rate: The interest rate for this loan is linked to the REPO RATE, offering a competitive and transparent pricing structure. Presently, the applicable interest rate is REPO RATE (6.50%) + 1.70 (Credit Risk Premium) = 8.20% for the AA Category.
(To check the latest and detailed interest rate of the Central Bank of India click here)

Repayment Period: Repayment of EMIs to start 3 months after completion of course. Repayment period (excluding moratorium period) is 8 years for limits up to Rs.7.50 lakh and up to 12 years for limits above Rs.7.50 lakh.

Age requirement: Minimum age of the student should be 23 years

The Central Bank of India offers a loan scheme specifically designed to provide financial assistance to students pursuing an MBA from top management institutes in India and abroad. The loan covers the cost of tuition fees, examination fees, books, and other related expenses.

Loan Amount: The maximum loan amount that can be availed under this scheme is up to Rs. 40 lakhs.

Co-applicants: Parents, guardian, spouse, or parents-in-law of the student may also be taken as co-applicants

Margin: No Margin money is required. Bank will provide you the total loan amount under the maximum limit.

Security: No collateral security or third-party guarantee is required. However, the bank may require the assignment of future income of the student. Additionally, a comprehensive life insurance policy for the student availing the educational loan to the minimum of the loan amount for a minimum period of the loan term (i.e., course period + moratorium period + repayment period) assigned in favor of the Bank is necessary.

Interest Rate: The interest rate for this loan is linked to the REPO RATE. Presently, it is REPO RATE (6.50%) + 1.70 (Credit Risk Premium) = 8.20% for the AA Category, ensuring affordability and cost-effectiveness for the borrowers.

Repayment Period: The repayment period for this loan is up to 15 years after the completion of the moratorium period, allowing the students to manage their loan obligations in a convenient manner, aligned with their post-MBA career progression. The moratorium period is the course period plus 1 year.

This video will provide you with an understanding of the concealed fees that may apply to various types of loans, including secured and unsecured loans, as well as loans from foreign lenders. Additionally, the video will explain how these hidden charges can impact your overall loan repayment and financial situation, and what steps you can take to minimize these fees and choose the most cost-effective loan option for your needs.

Our services are provided to you without any cost at WeMakeScholars. We don't charge any processing fees for our services, and this is made possible by the fact that our organization is supported by the Ministry of IT, the government of India as part of the Digital India campaign, which allows us to offer our services for free to students seeking scholarships and other forms of financial aid.

Purpose: Offering financial assistance to students pursuing vocational education and training from government-run entities supported by the National Skill Development Corporation or State Skill Missions.

Eligibility:

• Indian nationality required.
• Admission secured in a course backed by a Government Ministry/Department/Organization or a company/society/organization supported by National Skill Development Corporation or State Skill Missions/State Skill Corporations. Preferably leading to a certificate/diploma/degree issued by a Government or a recognized/authorized organization.

Interest Rate: RBLR+CRP Present ROI: 11.15% for Low Risk & 11.20% for Medium Risk category.

Loan Amounts: Minimum Rs. 5,000/- Maximum Rs. 1,50,000/-.

Margin: 5% of the loan amount

Security: No collateral or third party guarantee required. However, the parent will execute loan documents jointly with the student borrower. The loan is covered under the Credit Guarantee Scheme of NCGTC.

Moratorium period and Repayment period:

Repayment of EMIs starts after the moratorium period:

• 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: Up to 7 years.

Processing Fee: No processing charges.

Interest Rate Concession: None.

To kickstart your education loan process, you need to share your documents with your bank. We recently published an article listing all the documents you'll required for education loan. Take a look to get a clear idea. Here's a rundown of basic documents required for a Bank of Maharashtra education loan:

1. Proof of identity (Aadhaar Card, Voter ID, Passport, Driving License, etc.)
2. Proof of address (Aadhaar Card, Voter ID, Passport, Driving License, etc.)
3. Proof of admission (Admission letter from the institution)
4. Academic records (Mark sheets of 10th, 12th, and graduation, result of the entrance exam through which admission is being taken e.g. CAT, GRE, TOEFL, IELTS, etc.)
5. Last three months’ pay stubs or a salary certificate on company letterhead
6. Last two years’ Form 16 from your employer
7. Income Tax Return (ITR) filed for the last 2 years
8. Balance sheet and profit and loss account for the last three years (if the co-applicant is self-employed)
9. Affidavit of the property collateral owner (on Rs. 20 or 100 stamp paper)
10. Additional cheque for the attorney and evaluator charges (if done by the bank)
11. Letter outlining the gap sample on stamp paper costing Rs. 100

By creating a personalized document list that considers your individual profile and requirements, we can assist you in saving time and avoiding enrollment issues or delays.

To Apply Online:

1. Go to the Central Bank of India's website, select the "Cent Vidyarthi" section, or you can apply directly on WeMakeScholars official portal and click "Apply Now".
2. Fill in your personal info, contact details, academic records, course & loan details.
3. Upload necessary documents: ID, address proof, income proof, academic records, admission letter, and fee structure.
4. Submit the form online, keep a printout for your records upon receiving acknowledgment.

For Offline Application:

1. Visit the nearest Central Bank of India branch using the bank's branch locator on its website.
2. Collect the education loan application from the bank's staff and fill in all required details.
3. Attach clear copies of documents (ID, educational records, admission letter, etc.) with the form.
4. Submit the completed form to the bank's staff for processing. They'll assess your eligibility based on provided info and additional factors like your university, grades, and collateral if applicable.

Our goal at WeMakeScholars is to empower students with the resources and support they need to achieve their educational goals, and reducing the loan margin is just one of the many ways in which we are working towards this mission.

Pros

• Higher loan amount up to 100% of education cost
• No prepayment charges
• No collateral security required for loans up to INR 4 lakhs
• Interest rate concession of 1% may be provided by the bank during the study period, if interest is serviced during the study period 

Cons

• The loan has a high rate of interest
• The loan is not available for all courses
• Longer processing time 
• No clear explanation is given on the process of application 
• No scope for negotiation/ deviation 

The Government of India has introduced several interest subsidy schemes for students who wish to pursue higher education in India or abroad. These schemes provide financial assistance or interest subsidies to qualifying students. Some of the popular schemes include:

1. Central Govt. Interest Subsidy Scheme (CSIS)
2. Padho Pardesh Scheme
3. Dr. Ambedkar Scheme for OBC and EBC

(To know more about these subsidy scheme click here)

Central Govt. Interest Subsidy Scheme (CSIS)

Eligible students belonging to the EWS section of society are benefited under the CSIS scheme.

• Enroll for education in India.
• Belong to the EWS category.
• Have a family income under Rs 4.5 lacs per year.

Benefit: Eligible students are not required to pay any interest on their education loan during the moratorium period.

Padho Pardesh Scheme

The Ministry of Minority Affairs launched the scheme to benefit abroad study aspirants, belonging from EWS of minority communities.

• Enrollment in M.Phil., Ph.D., and Masters-level courses.
• Loan obtained from a scheduled bank as per IBA criteria.
• Family income not exceeding Rs 6 lacs annually, certified by the government.

Benefit: 100% interest subsidy is offered under this scheme.

Note: Padho Pardesh Scheme has been discontinued by the government after 31st March 2022. However, existing beneficiaries will continue to enjoy the benefits.

Dr. Ambedkar Scheme for OBC and EBC

Eligible students belonging to OBC and EBC sections, get interest subsidies in the moratorium period of their loan. It is only for study abroad aspirants.

• Admission to M.Phil, Ph.D., or Masters courses abroad.
• Family income below Rs 8 lacs annually for EBC and OBC.
• Caste certificate mandatory for OBC.
• Eligible loans are from scheduled banks as per IBA guidelines.

Benefit: Interest payable in moratorium period of the loan will be waived off.

Central Bank of India offers an EMI calculator on its website, yet we highly recommend utilizing the WeMakeScholars Education loan EMI calculator. This tool provides a comprehensive breakdown of your repayment statistics, encompassing:

• EMI amount
• Interest component in the EMI
• Principal amount repaid towards the loan
• Outstanding loan amount

For instance, to calculate the EMI for a Central Bank of India :
Imagine you've availed a Rs. 8 lakhs loan for a 36-month course duration. At an 8% annual interest rate, with a 15-month moratorium, where payments aren't required during study and moratorium periods, follow these steps:

Compute the total amount due after the moratorium period:
Total due = Loan amount + (Loan amount * Interest rate * Moratorium period / 12)
Total due = 8,00,000 + (8,00,000 * 8 * 15 / 100)
Total due = Rs. 9,60,000

Calculate the EMI using this formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where,
P = Principal amount (loan)
R = Monthly interest rate
N = Tenure (in months)
Monthly interest rate = Annual interest rate / 12
Monthly interest rate = 8 / 12 = 0.6667%
Tenure = Course period + Moratorium period
Tenure = 36 + 15 = 51 months
EMI = [8,00,000 x 0.6667% x (1+0.6667%)^51]/[(1+0.6667%)^51-1]
EMI = Rs. 19,869

Thus, your EMI for the Central Bank of India education loan would be Rs. 19,869.

Central Bank of India extends a 15-year repayment period, starting immediately after the moratorium ends. Students receive an education loan sanction letter containing the prevailing effective interest rate, repayment terms, EMI amounts, outstanding loan balance, and other essential parameters.

While monthly installments cover the repayment period, students can expedite loan closure through:

• Opting for shorter repayment spans
• Pre-payment or Partial repayment
• Considering loan transfer opportunities

Quick Processing: Your loan gets processed in 21 days by government banks and 7 days by private banks/NBFCs after document submission.

Expert Guidance: Our financial team helps choose the best lenders and loan options based on your eligibility and bank offers.

Lower Interest Rates: Access rates 0.5% to 2% lower than usual bank rates through us.

Negotiation Support: We negotiate better terms and rates on your behalf.

Simple Online Application: Apply easily from home; our portal reduces the need for bank visits.

Continuous Assistance: We support you through all loan stages, from sanctioning to repayment.

Tax Saving Assistance: Learn how to save on taxes with government-approved schemes like Section 80E, 80C, etc.

Cashback Offer: Enjoy up to Rs 3,000 cashback upon loan approval.

Free Services: All our services are free for applicants, supported and funded by the IT Ministry's Govt. of India under Digital India Campaign.