Education Loan in MP & Chhattisgarh

This article is intended to assist individuals from MP & Chhattisgarh who are interested in furthering their education, either within India or abroad. It is estimated that students typically need up to 15 Lakhs for studying in India and 45 Lakhs for studying abroad. The interest rate for financing education can vary depending on the lender and can range from 8.30% to 13.5%. If you are considering pursuing higher studies in India or abroad and living in MP & Chhattisgarh, then this article may provide useful information for you.

For Studies In India

For Foreign Studies

For studies in India 

For Foreign studies

Expenses Covered

Education loans intend to cover various expenses related to the student's education. The lenders in MP & Chhattisgarh provide education loans that can help students fund their education.

• The tuition fee of the Institution 
• The expense of accommodation
• Examination charges 
• Library charges
• Equipment charges 
• Airfare Charges (For abroad education)
• Insurance premium (For abroad education)

Moratorium Period

In most public banks, private banks, and NBFCs based in the city of MP & Chhattisgarh, the moratorium period lasts for a course duration plus 6 months to 1 year depending on the lender providing your loan. The conditions of loan repayment differ in every bank. Public banks do not require you to pay simple interest during the moratorium period. In private banks and NBFCs, simple interest is charged during the moratorium period which is compounded annually. Most NBFCs also provide an option of partial interest payment during the moratorium period. 

Loan Margin

The loan margin is an additional cost that the borrower must pay in order to obtain an education loan. This amount is typically a percentage of the total loan amount. In public banks, the loan margin is typically around 10%, while in private banks, it can range from 5% to 10%.

For example, if a bank charges a 10% loan margin and the student is applying for a loan of 50 Lakhs, the student would need to arrange an additional 5 Lakhs as the loan margin on their own in order for the loan to be disbursed. It's important to take the loan margin into account when considering an education loan, as it can affect the overall cost of the loan.

Collateral Margin

The collateral margin is calculated in the case of a secured or collateralized loan. The collateral margin is the amount calculated on the basis of the collateral provided as security. In cases where the student is unable to pay back the loan amount, the bank reclaims the amount by utilizing the property or collateral provided for the secured loan.

The following lists the paperwork or document checklist needed to apply for an education loan in MP & Chhattisgarh.

Collateral documents required for a secured education loan in MP & Chhattisgarh

If you are planning to go for a secured loan, you would also be required to provide some collateral documents for the property you are providing for the said loan. The collateral documents required for an education loan in MP & Chhattisgarh are mentioned below. 

1. The title deed to the pledged property

2. A recorded will, a selling agreement, or a gift deed.

3. The original receipt for the above-mentioned agreement's registration.

4. The letter of allocation from the local government or the appropriate authorized government agency.

5. A deed from a prior chain of sales that is at least 30 years old, an EC, or both are required to prove title. It is a 30-year record of who owned the property for the previous 30 years and from whom. The documents from the last transaction will suffice if you've owned the property for more than 30 years.

6. Present power and property tax bills originate from the same address.

Acceptable collaterals in MP & Chhattisgarh for education loans

There are some restrictions and requirements that apply to acceptable collateral for secured education loans. The list of collateral that is typically accepted in MP & Chhattisgarh for secured education loans is shown below.

• House, Flat, Non- agricultural land with boundaries 
• Commercial properties
• Agricultural land
• FD, Insurance policy, and Government bonds   

When banks or lenders have been directly approached for an education loan, the students are met with rejection. Below mentioned are a few of the specific reasons students face rejection for an education loan in MP & Chhattisgarh. 

• Poor CIBIL scores: Loan applications may be denied if the financial co-applicants CIBIL score does not meet the bank's requirements. Banks usually require a minimum CIBIL score of 685, but SBI may accept scores as low as 591.
• Poor academic scores: The applicant's prospects of getting the loan may reduce if they have a history of poor academic performance in the past.
• Chosen country for higher studies: Third-world nations are typically not accepted as destinations for higher education by banks. This can be a result of worries regarding the caliber of instruction or the likelihood of finding employment after graduation. 
• Chosen course for higher studies: Banks typically favor STEM degrees over courses in other academic disciplines because STEM graduates have better employment chances.
• Insufficient documentation: Banks are unable to start the process of obtaining an education loan for international studies without the required paperwork. To be eligible for an overseas school loan, it is crucial to submit the required paperwork and income verification.

• Direct engagement with lenders -You can contact the lender directly by obtaining the contact number of the executive responsible for your case from the lender's team.
• Technologically advanced - With WeMakeScholars, you can conveniently apply for, monitor, and oversee your education loan from the comfort of your own home throughout the entire application process.
• The cashback offered -   By applying for your study abroad education loan through WeMakeScholars, you are supporting the Digital India campaign and will be rewarded with a cashback of up to INR 3000 for multiple disbursements.
• Negotiation - The team at WMS will work to secure the highest return on investment for you by negotiating with the lenders on your behalf. Additionally, we ensure that you are charged a fair price for the entire process, including the legal fees and any other expenses.

Your amortization plan might be like this, for instance, if you took out a 20 lakh unsecured education loan from Hyderabad at a rate of interest of 10.5% with a grace period of 6 months and a repayment duration of 15 years.

• Monthly EMI: 26,323
• Total payment: 47,38,078
• Total payable interest: 27,38,078

Padho Pardesh Scheme

Eligibility:

• The applicant is a member of a religious minority (Muslim, Christian, Sikh, Buddhist, Jain, Zoroastrian) and has an annual family income of less than 6 lakhs.

Note: The Padho Pardesh Scheme is no longer in effect as of April 1, 2022. However, as of March 31, 2022, the previous beneficiaries 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.

In the Indian state of MP & MP & Chhattisgarh, there are many reputable educational institutions that offer a variety of academic programs. Some of the most notable institutions in the state offer courses in fields such as engineering, medicine, and the arts.IIT MP & Chhattisgarh.

• Indian Institute of Technology (IIT) Indore
• Devi Ahilya Vishwavidyalaya (DAVV) Indore
• Jawaharlal Nehru Agriculture University (JNAU) Jabalpur
• Dr. Harisingh Gour Vishwavidyalaya (DHSGSU) Sagar
• Pandit Ravishankar Shukla University (PRSU) Raipur
• All India Institute of Medical Sciences (AIIMS) Raipur
• Pt. Sundarlal Sharma (Open) University (PSSOU) Bilaspur
• National Institute of Technology (NIT) Raipur