Education Loan in Karnataka

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Table of content

  1. Best Banks for Education Loans in Karnataka
  2. Education Loan Interest rate in Karnataka
  3. Other Education Loan features offered by Banks or NBFCs in Karnataka
  4. Documents required for availing an Education Loan in Karnataka
  5. Common reasons for Education Loan rejection in Karnataka
  6. Why Choose WeMakeScholars for an Education Loan in Karnataka?
  7. The Repayment Plan for Education loans in Karnataka
  8. Education Loan Subsidy Schemes applicable to Students from Karnataka
  9. Higher Education in Karnataka
  10. FAQ's
  11. Need Help? Ask Here!

This article is for you if you live in Bangalore, Mysore, or any other city in Karnataka and are seeking a student loan to pay for your education in India or abroad. According to statistics, students in Karnataka typically need an education loan of roughly 15 lacs to study domestically and 45 lacs to study overseas. Depending on the kind of loan and lender, Karnataka education loan interest ranges from 8.30% to 13.5%. You can find further information down below. 

Best Banks for Education Loans in Karnataka

For studies in India

Bank Name

Scheme Name

Loan amount- Collateral Required

Processing fee

State Bank of India 

SBI Student Loan Scheme 

Upto 1.5 crores secured 

10K + GST 

Bank of Baroda 

Baroda Scholar 

Upto 1.5 crores secured 

10K + GST 

 

Union Bank of india 

Union Bank India Education Loan

Upto 2 crores with collateral 

No processing fee 

Karur Vysya bank 

Education Loan Scheme 

Upto 1.5 crores with collateral 

10K + GST 

Auxilo  

Auxilo education loan for studying in India

Upto 60 lakhs 

1-2% of the loan amount 

Avanse 

Education loan for studying in India 

Upto 60 lakhs 

1-2% of the loan amount 

Incred 

Education loan for studying in India 

Upto 60 lakhs  

1-2% of the loan amount 

Axis 

Education loan for studying in India 

Upto 40 lakhs unsecured 

1-2% of the loan amount 

ICICI 

Education loan for studying in India 

Upto 50 lakhs unsecured 

1-2% of the loan amount 

IDFC First Bank

Education loan for studying in India 

Upto 35 lakhs unsecured

1-2% of the loan amount 

 

For Foreign studies

Bank Name

Scheme Name

Loan amount- Collateral Required

Processing fee

State Bank of India 

SBI Global Ed-Vantage Scheme

Upto 1.5 crores with collateral 

10K + GST 

Bank of Baroda 

Baroda Scholar 

Upto 1.5 crores with collateral 

10K + GST 

Karur Vysya Bank 

Education Loan Scheme 

Upto 1.5 crores with collateral 

10K + GST 

Union Bank of India 

Union Bank Abroad Education Loan

Upto 1.5 crores with collateral 

Zero 

Auxilo 

Education loan for studying abroad 

Upto 60 lakhs for studying abroad 

1-2% of the loan amount 

Avanse 

Education loan for studying abroad 

Upto 60 lakhs for studying abroad 

1-2% of the loan amount 

Incred 

Education loan for studying abroad 

Upto 60 lakhs for studying abroad 

1-2% of the loan amount 

Axis 

Education loan for studying abroad 

Upto 40 lakhs unsecured 

1-2% of the loan amount 

ICICI 

Education loan for studying abroad 

Upto 50 lakhs unsecured 

1-2% of the loan amount 

IDFC First Bank 

Education loan for studying abroad 

Upto 50 lakhs unsecured 

1-2% of the loan amount

 

Education Loan Interest rate in Karnataka

For studies in India

Bank Name

Interest rate

Interest rate concession

State Bank of India 

Starts from 8.30% 

0.50% - for female students

0.50% - Rinn Raksha

Bank of Baroda 

Starts from 10.60%

-

Union Bank of india 

Starts from 11.15%

0.5% for female students

1% if the SI is paid in full 

Karur Vysya bank 

Starts from 10%

-

Auxilo  

Starts from 11% 

-

Avanse 

Starts from 11% 

-

Incred 

Starts from 11% 

-

Axis 

Starts from 11.5%

-

ICICI

Starts from 10.5%

-

IDFC First Bank 

Starts from 8.5%

-

 

For Foreign studies

Bank Name

Interest rate

Interest rate concession

State Bank of India 

Starts from 10.90% 

0.50% - for female students, 

0.50% - Rinn Raksha

Bank of Baroda 

Starts from 10.60%

-

Union Bank of india 

Starts from 11.15%

0.5% for female students

1% if the SI is paid in full 

Karur Vysya bank 

Starts from 10%

-

Auxilo  

Starts from 11% 

-

Avanse 

Starts from 11% 

-

Incred 

Starts from 11% 

-

Axis 

Starts from 11.5%

-

ICICI

Starts from 10.5%

-

IDFC First Bank 

Starts from 8.5%

-

Don't let finances stand in the way of your dreams - apply with WeMakeScholars for a low-cost education loan now.

Other Education Loan features offered by Banks or NBFCs in Karnataka

Expenses covered 

The expenses covered by education loans given out by banks or NBFCs located in Karnataka include,

  • College tuition fee
  • Fee for accommodation
  • Examination costs
  • Library fees
  • Laboratory costs
  • Price of Books
  • Miscellaneous costs 
  • Cost of flight tickets (For abroad education)
  • Price for the applicant's insurance (For abroad education)

Moratorium Period 

The majority of Karnataka-based banks have moratorium periods of around course duration plus six months or one year. Different payback terms apply to public banks, private banks, and NBFCs during the moratorium. Simple interest payments are not required during the moratorium period at public banks. Compound interest must be paid in private banks throughout the moratorium period. NBFCs require that EMI be paid throughout the moratorium period.

Loan Margin

The loan margin, which must be arranged by the student or applicant, is a percentage of the total loan amount. The student will need to arrange with 2 lakhs in order for the loan to be approved, for instance, if the loan margin is around 5% and the loan amount is around 40 lakhs.

The loan margin at public banks typically amounts to 10% of the entire loan amount. The loan margin in private banks ranges from 5% to 10%.

Collateral Margin

The collateral margin is the part of the total loan amount that is covered or secured by collateral. The collateral margin is part of the total loan amount that is covered by collateral. For secured loans, the collateral margin is often determined. Banks utilize the collateral provided by the student or applicant to reclaim the outstanding amount in the event that the loan cannot be repaid by the applicant.

Documents required for availing an Education Loan in Karnataka

Parameter

Details 

Basic documents for the applicant (student) and co-applicant and guarantor

    1. Completed application form with the applicant's details filled in with two passport-size pictures. 
    2. A passport/ voter ID card/ electricity bill/ telephone bill/ ration card/ bank account statement and Aadhar are all acceptable forms of identification as proof of residency. If the applicant's permanent and current addresses are different, two different proofs are needed.
    3. Identity proof: PAN card and passport
    4. Personal Asset and Liability Statement in this format, as determined by the branch professional: 
    5. The most recent six-month bank statement (personal/salary). The co-applicant credits must be presented, and if the co-applicant is self-employed, one year's worth of company transactions must be documented.

The documents must be self-attested 

Applicant academic documents

    1. Proof of admission/enrollment in the program (should be evidencing total course duration)
    2. The course fee structure (If available, i20 for USA)
    3. Scorecard of GRE/IELTS/GMAT
    4. University Ranking printout form
    5. Education mark sheets and certificates- 10th, 12th, Degree 

Financial Co-applicant Income documents

If Salaried:

    • Most recent pay slips (for the last 3 months)
    • Form 16 of the previous 2 years.
    • ID card of the employer
    • last two years ITR

If Self-employed:

    • past three year's ITR
    • 3 years Profit & Loss account and the balance sheet (only if self-employed businessman)
    • Proof of company address/ Business address

Other Documents

    1. A cheque for Rs. 11,800 is required as a processing fee.
    2. A letter saying that the co-applicant would be responsible for any remaining costs not covered by the loan. additional cheques for attorney and evaluator fees (if your legal and valuation process is done by the bank itself)
    3. Affidavit of the property collateral owner (on Rs. 20 or 100 stamp paper). If there are many owners of the property, each of them must provide an affidavit

Additional docs 

    1. Any pending loan statements from the previous year.
    2. Receipt for any payments in advance.
    3. Proforma invoice for the trip, laptop, or another item if you're requesting a loan for it.
    4. If appropriate, a letter stating the lack of co-applicants ITR
      A letter outlining the gap in your profile if any 

 

Collateral documents which are required for a secured education loan in Karnataka 

1. The property's title deed 

2. A Will, A sale contract, or A Gift deed that has been registered.

3. The initial registration receipt for the above-specified agreement.

4. A letter of allocation from the municipal corporation 

5. A 30-year connection document or A preceding chain of sale document establishing title or EC is required. It contains a 30-year timeline of who acquired the property in the 30-year period before from whom. If you have held the property for more than 30 years, the previous sale paperwork will do.

6. Recent invoices for property taxes and electricity from the same address

7. A duplicate of the plot layout or construction plan that the municipality has approved.

Acceptable collaterals in Karnataka for education loans

  1. House, Flat, Non- agricultural land with boundaries 
  2. Commercial properties (A few banks)
  3. Agricultural land
  4. FD, Insurance policy, and Government bonds   

Note: 

In Bangalore, the municipal corporation split the properties into three categories in 2007: "A Khata" properties, which are entirely legal and have paid all taxes; "B Khata" buildings, which are illegal; and "E Khata" properties, which are electronic. 

  • A Khata: Everyone accepts the A Khata for an education loan in Bangalore. An 'A' Khata certificate is issued to a legal property that fulfills all Government regulations regarding building bylaws and taxation rules in Bangalore.
  • B Khata: Government banks don't accept B Khata but some private banks accept it if there is DC conversion. A 'B' Khata refers to properties that are in violation of building bylaws or are pending for clearance of property taxes or do not conform to Government regulations with respect to properties.
  • E Khata: E Khata refers to electronic Khata which is filed online. It allows the owner of the property to pay their property taxes online. It is mostly acceptable in some Government banks but it may depend on a case-by-case basis for Karnataka, for that Khata certificate and Khata extract is required. 
  • Khata Certificate - The certificate is a document that asserts that the tax records of a particular property are in the name of the owner. It is issued by BBMP and is required for the registration of property or transfer of property in the name of the owner to any other person.
  • The Extract - The extract contains all the details of a property as collected from the property assessment register. Such details include the owner's name, property size, property valuation, date of last assessment, property used for, demarcations, etc. It is valid for 5 years.

Convert B Khata to A Khata

B Khata properties deviating very little from the current laws and regulations accepted for building can be converted to A Khata. By meeting certain standards, the B Khata property's owner can upgrade it to an A Khata. Follow these few steps-

Step 1- Apply for District Commissioner (DC) Conversion to convert the agricultural land for non-agricultural use.
Step 2- Clear the property taxes if any, payable on the property as per Government norms.
Step 3- Get the Khata form from the BBMP office. Fill in the required details in the form as required.
Step 4- Collect all the documents that are required while submitting the Khata form.
Step 5- Pay BBMP the fee for converting your B Khata to A Khata. Submit the required documents and the tax receipt along with the filled-in form to the concerned area's Assistant Revenue Officer.

Generally, after submitting the form along with the relevant documents, you can expect your A Khata within a period of 4 to 6 weeks.

Get the help you need to get started on your career- request a custom document list from us today

Common reasons for Education Loan rejection in Karnataka

Below mentioned are the main reasons for loan rejection in Karnataka 

  • Poor CIBIL scores: Loan applications are refused if the co-or applicant's financial co-applicant CIBIL score falls short of the bank's requirements. Typically, banks demand a CIBIL score of 685, however, SBI allows for scores as low as 591.
  • Poor academic scores: The likelihood of the loan being approved may be impacted by the applicant's prior academic performance.
  • Chosen country for higher studies: Third-world nations are typically not accepted by banks as destinations for higher education.
  • Chosen course for higher studies: Banks typically favor STEM studies over those in other subjects since STEM courses have a better possibility of leading to employment.
  • Insufficient documentation: Banks cannot begin the process of getting you an education loan overseas without the necessary paperwork. So, in order to qualify for an education loan to study abroad, suitable documents and income proofs are needed.
  • Collateral issues: gram panchayat properties and B khata properties are not accepted as collateral
Take charge of your education and finances. Check your eligibility for a loan with us.

Why Choose WeMakeScholars for an Education Loan in Karnataka?

  • Direct engagement with lenders - By obtaining the phone number of the executive overseeing your case from the lender's staff, you may speak with the lender directly.
  • Technologically advanced - You may apply, track, and manage your student loan from the convenience of your home by using WeMakeScholars to complete your application for an education loan.
  • The cashback offered - You get a cashback of INR 3000. As a thank you for supporting the Digital India program when you apply for your education loan through WeMakeScholars 
  • Negotiation - The WMS team will bargain on your behalf with the lender to get a lower ROI. Additionally, we guarantee that you pay a fair price for the entire procedure, including the lawyer's fee and other costs.
Let us take the worry out of the education loan disbursement process with our post-sanction assistance.

The Repayment Plan for Education loans in Karnataka

If you take out a secured loan of 55 Lakhs at an interest rate of 9% from a public bank in Karnataka with a grace period of 6 months and a repayment period of 15 years your repayment schedule would look something like this. 

  • Monthly EMI: 64,853
  • Total payment: 1,16,73,568
  • Total Interest Payable: 61,73,568

Repayment cycle

EMI

Interest portion

Principal portion

Loan Outstanding

End of 1st year

64853

46508

18345

6182747

End of 2nd year

64853

44787

20066

5951575

End of 3rd year

64853

42905

21948

5698718

End of 4th year

64853

40846

24007

5422140

End of 5th year

64853

38594

26259

5119618

End of 6th year

64853

36131

28722

4788717

End of 7th year

64853

33436

31417

4426775

End of 8th year

64853

30489

34364

4030881

End of 9th year

64853

27266

37587

3597849

End of 10th year

64853

23740

41113

3124195

 End of 11th year

64853

19883

44970

2606110

End of 12th year

64853

15665

49189

2039425

End of 13th year

64853

11050

53803

1419580

End of 14th year

64853

6003

58850

741590

End of 15th year

64853

483

64370

0

WeMakeScholars is committed to providing students with reliable and all-encompassing services, and we strive to make the loan application process easier by offering post-sanction assistance.

Let us take the worry out of the education loan disbursement process with our post-sanction assistance.

Education Loan Subsidy Schemes applicable to Students from Karnataka

Padho Pardesh Scheme:

The Padho Pardesh scheme was a subsidy scheme introduced by the ministry of minority affairs for students pursuing overseas education. 

Eligibility:

  • The applicant belongs to a religious minority (Muslim, Christian, Sikh, Buddhist, Jain, Zoroastrian) and Family Income equates to less than 6 Lakhs.  

Note: The Padho Pardesh Scheme is no longer in effect as of April 1, 2022. However, the previous beneficiaries as of March 31, 2022, will continue to receive the interest subsidies during the loan's term and its moratorium period.

Central Scheme for Interest Subsidy for Economically Weaker Sections

Eligibility:

  • The household income of the applicant is less than 4.5 lakhs.

Dr. Ambedkar Central Sector Scheme

Eligibility: 

  • The applicant comes from a financially underprivileged class, and their total annual family income is less than 8 lakhs.
  • The applicant is from the OBC class, and their family makes less than 8 lakhs per year.

Higher Education in Karnataka

Numerous well-known institutions in Karnataka provide courses that range from engineering to medicine and arts. Below are a few of the top institutions.

  • National Institute Of Technology - [NITK]
  • Manipal Institute Of Technology - [MIT]
  • R V College Of Engineering - [RVCE]
  • Ramaiah Institute Of Technology - [RIT]
  • International Institute Of Information Technology - [IIIT-B]
  • Siddaganga Institute Of Technology - [SIT]
  • New Horizon College Of Engineering - [NHCE]

Education Loan FAQs

  • Which bank is best for education loans in Bangalore?

    Public banks are always a better option to get an education loan as they can provide the best interest rates on education loans and also do not charge the student simple interest during the moratorium period.

  • Why does an education loan get rejected?

    There are many factors that can affect a student’s chances of getting an education loan. Poor CIBIL score of the co-applicant, poor academic scores of the student/ applicant, and no proper documentation can be one of the major reasons for the rejection of an education loan.

  • Can I get an education loan without my parents?

    You can get an education loan by nominating your legal guardian to be your co-applicant, in case the parents are unavailable.

  • Is property required for an education loan?

    No, property or collateral is not mandatory for an education loan as the student can also take out an unsecured or non-collateralized education loan to finance their higher education.

  • Does SBI provide student loans?

    Yes, SBI provides education loans to students for both studies in India and Abroad at an average interest rate of around 10%.

  • Are hostel fees included in the education loan?

    Yes, accommodation fees, uniform fees, the cost of books, and other academic expenses are covered by an education loan.

  • Do all banks offer student loans?

    No, all banks do not offer an education loan. Generally, only the mainstream public banks, private banks, and NBFCs offer special education loan products. A few banks finance education loans through their personal loan product.

NEWS

Karnataka CM introduces a range of benefits for minorities in the 2023-24 budget

Karnataka Chief Minister Siddaramaiah has introduced a series of measures in the state budget for 2023-24 aimed at uplifting minority communities through enhanced education and employment prospects.

A notable initiative is the "Arivu" educational loan scheme, which offers subsidized loans of up to Rs one lakh per year at a two percent interest rate for minority students taking admission through entrance examinations in professional courses like engineering, medicine, and 28 other such courses

The government has allocated Rs 75 crore for this scheme. Additionally, the budget includes the establishment of a 10-month residential coaching program, in partnership with reputable coaching institutions at Haj Bhavan in Bengaluru, to assist aspiring candidates for competitive exams such as the IAS and KAS. These initiatives exemplify the government's dedication to empowering minority communities by ensuring 

Last Updated On - 11/07/2023 

Karnataka Government Considers Increasing Education Loans for Minority Students

Karnataka Housing and Minorities Welfare Minister Zameer Ahmed Khan announced potential enhancements to financial aid for minority students in the state. During the launch of schemes for 2023-24 by the Karnataka Minorities Development Corporation (KMDC), Khan proposed raising education loan amounts from ₹3 lakh to ₹5 lakh.

Presently, KMDC extends a ₹3 lakh loan to students admitted to MBBS programs under government quotas. The increase aims to alleviate financial burdens for economically challenged students pursuing higher education.

Furthermore, Khan hinted at a potential boost in education loans for minority students studying abroad. Currently at ₹20 lakh, the loan for students pursuing foreign degrees and post-graduation could increase to ₹30 lakh.

Khan also unveiled other welfare programs, including a ₹3 lakh subsidy for unemployed individuals to buy four-wheelers, the 'Shrama Shakti' skill development initiative, and a ₹50,000 loan scheme for widows, unmarried, and divorced women.

These initiatives are poised to empower Karnataka's minority communities, expanding access to education and economic prospects. Additionally, the state secured an annual ₹50 crore grant for National Minority Development Board schemes, further bolstering minority welfare efforts.

Last Updated- 23/08/2023

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Naresh Kumar
WeMakeScholars- supported by IT Ministry, Govt. of India.
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