Federal Bank Education Loan

Federal Bank is one of India’s leading private sector banks facilitating a customer base of more than 12 million, including 1.5 million NRIs. It offers education loans of upto Rs 1 Cr, to ambitious students at affordable interest rates starting from 11.95%.

Quality education is paramount, therefore, Federal bank supports all students by providing them student loan through the below-mentioned education loan products of Federal bank:

Federal Bank Education Loan Schemes for Abroad studies

• Special Vidya Loan
• Federal career solution loan

Federal Bank Education Loan Schemes for studies in India

• Special Vidya Loan
• Fed Scholars
• Federal Career Solution loan

Federal Career Solution loan

Students can apply to take loans for their higher education in any course abroad, except for vocational training and skill development.

Special Vidya Loan

Special Vidya Loan

Fed Scholars (without collateral)

Features of Fed Scholars

• Interest subsidy is available for eligible students
• Students can reimburse their expenses made during the running academic year
• There are no processing fees for this education loan scheme

Federal Career Solution loan

Acceptable collaterals with their collateral margin

The education loan processing fees for Federal Bank is around 1-2% of the sanctioned loan amount. However, for non-collateral loan upto Rs 20 lacs under Fed Scholarship scheme, there is no processing fees.

WeMakeScholars being a government funded initiative offers all its premium loan sanctioning services totally free of cost. Get in touch with us to start your education loan application process, by requesting a callback or filling up a common application form.

The requirement of documents may differ for each scheme but here we have provided a list of general documents required for Federal bank education loan:

Section 1: Application form 

Student loan application form (hardcopy) filled on WeMakeScholars website with 2 passport size photographs

Section 2: Basic documents for Applicant (student) and co-applicant and/or Guarantor

• Identity proof – Passport of the applicant (if going abroad), PAN Card 
• 6 months latest bank statement of personal and salary account of the applicant, showing salary crediting or if self-employed 1 years business transactions
• At least 2 proof of address – Electricity Bill/ Passport/ Ration card/ Bank account statement/ Voter ID Card/ Telephone Bill/ Aadhar card. 
• Personal asset and liability statement (approved by the bank professional)

All the documents should be self-attested.

Section 3: Applicant Academic Documents

• Certificates and study marksheets- 10th, 12th, Degree
• Proof of admission in the course (mentioning total duration of the course)
• Score card of entrance examination
• Fee structure given by the college or university’s side

Section 4: Co-applicant Income documents

If Salaried

• ID card of the company
• Last 2 years form 16 
• Last 3 month’s salary slip
• ITR of last 2 yrs

If Self-employed

• Address proof of  business
• Last 3 yrs balance sheet
• Profit & Loss account of last 3 years (only if self-employed)
• ITR of last 3 yrs

Section 5: Other Documents

• Letter mentioning other expenses, apart from those covered in loan expenses will be borne by the co-applicant as per the format provided by your financial officer at WeMakeScholars
• Notarised joint affidavit with the student and co-applicant in bank’s standard format Format to be provided by WeMakeScholars Financial officer

Section 6: Additional docs (if applicable)

• All loan account statements of 1 year, if any pending loans.
• Certificate of gap if the student has had a failure or break in studies on Rs. 100 stamp paper. (Format to be provided by WeMakeScholars Financial officer)
  Receipts of payments made previously if any.

You can take a leap ahead of others by uploading your documents on the WeMakeScholars documents portal as per the documents checklist provided by your financial officer, request a callback or fill the common application form to  get your specially customized documents checklist.

Federal bank offers the facility to students to opt for education loan insurance by paying 1-2% of loan amount at insurance premium. The education loan insurance safeguards the parents or co-applicants, in case of any mis-happening with the applicant, resulting in their inability to pay. 

However, it is not a requirement to acquire education loan insurance. But, if you want to keep your dependents safe, while you are pursuing your higher education. Talk to your financial officer at WeMakeScholars to get more insights about your education loan insurance.

The loan margin percentage varies depending on the loan product; the loan margin percentages for education loans from Federal Bank are shown below:

Many times students find it difficult to arrange funds for their loan margin, in that case, they should process their education loan with WeMakeScholars, as we can help them reduce their loan margin and make it affordable for them to process their education loan.

The application process to take an education loan from Federal bank is:

Step 1 : Reach out to WeMakeScholars by Requesting a callback or filling a common application form

Step 2 : Give all your education loan details to your assigned  financial officer over a call

Your financial officer will analyze your loan profile and suggest you the best lenders, to get your loan sanctioned.

Step 3 : As per your eligibility and bank policies, choose your lender and tell your financial officer.

Step 4 : Submit all your documents in the bank, or upload them on WeMakeScholars documents portal according to the document checklist given by your financial officer.

Step 5 : Sit back and relax, your financial officer will take care of everything else, if required take follow ups from them from time to time.

Step 6 : Within 1 week, collect your loan sanction letter from private banks or NBFCs and within 15-20 days from the government bank.

The application process is not as simple as it looks if you go directly to the banks to get your education loan sanctioned. Following is the list of issues if you go directly to the banks:

• No clear idea about the eligibility for education loan
• Lack of proper customer services
• No particular list of required documents
• Unavailability of correct information
• Issues in legal and valuation reports
• Lots and lots of documentation
• Multiple visits to the banks, delaying the process

To fast track your education loan process, visit WeMakeScholars and apply online for an education loan. Here are the benefits of processing your education loan via WeMakeScholars:

• Minimal Processing time - Your education loan will be sanctioned within 15-20 days from a public bank and within 7 days from any public bank or NBFCs, after your documents are submitted.
• Digitized application process - Capitalizing the power of digitalization, you can apply for your education loan from the best lender and even complete the entire process, online.
• Expert guidance - With years of experience, we hold expertise in guiding students to get their education loan sanctioned, as we process 1000’s of loan files everyday. 
• Negotiation support - Our financial officers, if required, will negotiate on your behalf with the lenders team in terms of interest rates and bank policies. 
• Consistent availability - Your financial officer will be available from 9 AM to 9PM on all working days to help you out at every step of the process, till your loan is sanctioned, disbursed and repaid back to the banks.
• Cashback offer - When processing an education loan with WeMakeScholars you can get up to Rs 3,000 as a cashback at the time of your disbursement from us. 
• Tax benefits - We make sure you save your taxable income by informing you about the tax benefit schemes under Section 80E, Section 80C of the Income tax department.

We are the leading education loan processing partner and have helped thousands of students in getting their education loan sanctioned within their deadline. Request a callback, or fill a common application form, that will connect you to 10+ public and private banks in India, so that you can compare and get the best education loan deal.

Students opt to transfer their education loan to federal bank due to the following reasons:

• Easy repayment policies
• Cheaper rate of interest
• Wider coverage of education loan scheme
• Good serviceability and customer service
• Great accessibility
• Student-friendly loan conditions
• Easy bank policies

But how to transfer an existing education loan to Federal bank?

To transfer your existing loan from another bank to Federal Bank, you need to follow the steps listed below in order; 

• Collect proof of the pending loan amount from your present lender. 
• Contact WeMakeScholars by asking for a callback, stating that you wish to transfer your loan.
• Submit your documents to the Federal Bank as instructed by your Financial Officer.

Once your loan transfer is approved, the Federal Bank will pay the outstanding balance of your loan to your previous lender. And the same amount will be sanctioned by the Federal Bank as your new education loan.

The education loan EMI amount in Federal Bank depends on the following factors:

• Rate of interest
• Type of interest rate, simple or compound
• Repayment duration
• Loan amount
• Moratorium period
• Loan Amount Paid off by Semester 

To get the exact calculation of your loan EMI amount, use the WeMakeScholars education loan EMI calculator, it is highly recommended because of:

• 100% accuracy - It has been specially designed, giving attention to details so that you always get highly accurate results.
• Strategic advantage - After getting the calculation results, you can decide upon your strategy to choose the other parameters of your education loan
• Detailed explanation - The results of the calculation are detailed and explain the entire flow of funds after each EMI installment.
• Free of cost - This education loan EMI calculator is free of cost for students, just like the other services offered by WeMakeScholars.

The Federal Bank provides a moratorium period of course duration plus 6 months or 3 months after getting a job. And then the education loan repayment period starts, which can last upto 15 years at maximum.

Suppose a student gets an education loan of Rs 25 lacs at a 12% rate of interest for 15 years. Then the repayment schedule table of that student will look like the following:

However, students can choose to pay back their Federal Bank education loan even earlier by using the following methods:

• Prepayment or Part Payment
• Opting for shorter repayment periods
• Considering transferring your education loan

*TIP - While giving the last cheque as your education loan EMI repayment, we suggest you keep a little extra amount of around Rs 5,000 or Rs 10,000, to avoid any penalty or CIBIL issue in the future.

WeMakeScholars' team will provide you with additional money-saving advice while you complete your student loan, from application to repayment when you do so through our service. Choose WeMakeScholars to handle your student loan processing by requesting a callback or filling out a common application form.

Padho Pardesh Scheme

The scheme was launched to benefit students belonging to EWS of notified minority communities, going for their studies abroad.

Eligibility criteria for Padho Pardesh Scheme

• Only loan taken under IBA guidelines from a scheduled bank
• Students should pursue courses at M.Phil, Ph.D. levels, and Masters.
• Annual family income of the student should not exceed Rs 6 lacs per year.
• The student’s family income certificate is mandatory.

Note: The scheme has been stopped. However, beneficiaries as of 31st march 2022 will continue to receive interest subsidy.

Dr. Ambedkar Interest subsidy scheme for OBC and EBC students

The Ministry of Social Justice and Empowerment launched the scheme for students belonging to  EBC and OBC categories, to give rebates on their interest payable within the moratorium period of their education loan. Eligible students going abroad can take benefit of this scheme.

Eligibility criteria for Dr. Ambedkar Interest subsidy scheme for OBC and EBC students

• Family income of the student should not be more than Rs 8 lacs per annum for EBC category and OBC category
• Students should secure admission in the approved courses at M.Phil, Masters, or Ph.D. levels abroad
• Students belonging to OBC category will have to produce their caste certificate.
• Loan taken from scheduled banks as per the Indian Banking Association guidelines are only acceptable

Central Scheme for Interest Subsidy (CSIS)

The scheme was announced by the MHRD, now the Ministry of Education, to grant interest subsidies on education loans taken by students belonging to the EWS section of society. 

Eligibility criteria for CSIS 

• Students should have proof of belonging from the EWS section of society.
• Students must have secured admission in India in an approved course.
• Student’s annual family income should not exceed Rs 4.5 lacs.

Benefit: In the moratorium period, eligible students are not required to pay any interest on their education loan taken to study in India.