Submitted By: AYON GHOSH P/MN/R/09/112 SECTION: B
A DISSERTATION REPORT ON “COMPARATIVE STUDY OF EDUCATION LOAN WITH REFERENCE TO SBI, PNB AND HSBC”
1
Certificate from the Guide
This is to certify that the Project Work titled “COMPARATIVE STUDY OF EDUCATION LOAN WITH REFERENCE TO SBI, PNB AND HSBC” is a bonafide work of Mr. Ayon Ghosh Roll No: P/MN/R/09/112 Section B carried out in partial fulfillment for the award of PGDBM of ISB&MKolkata under my guidance. This project work is original and not submitted earlier for the award of any degree / diploma or associate ship of any other Institution.
Place:
Kolkata
Date:
Signature of the Guide:
Name of the Guide: Guide: Professor Asish Mitra
Declaration by the Student I, Mr. Ayon Ghosh hereby declare that the Project Work titled “COMPARATIVE STUDY OF EDUCATION LOAN WITH REFERENCE TO SBI, PNB AND HSBC” is the original work done by me and submitted to the ISB&M, Kolkata in partial fulfillment of requirements for the award of Post Graduate Diploma in Business Management in Finance & Marketing is a record of original work done by me under the supervision of Prof. Asish Mitra
Roll No: P/MN/R/09/112 Section: B Date:
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ACKNOWLEDGEMENT It has been a great learning learning experienc experiencee on this project project entitled entitled “Compara “Comparative tive Study of Education Education Loan With Reference TO SBI, PNB, and HSBC”. I would like to thank Prof. Asish Mitra for imparting knowledge and guidance to me in the field of Finance and also for his able guidance and support through out my project completion.
Table of Content Page No. 1. Introduction of Education Loan 6
2. Research Methodology 7
3. SBI Education Loan Scheme 8
4. PNB Education Loan Scheme 10
5. HSBC Education Loan Scheme 13
6. Findings 15
7. Conclusion 16
8. Recommendations 17
9. Appendix
10. Bibliography
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INTRODUCTION Education loans can augment the boundaries of what we can achieve Education never ends – it is not said without reason. We are educated all our lives and getting an education not only is a great achievement but something that gives you the tools to find your own way in the world. Education is indispensable; little do we realize how much more it can bring to us in terms of worldly amplifications. Anyone can have propensity and the natural endowment for education. But one might not have the resources to finance their education. We certainly can’t let lack lack of resour resources ces impede impede you from from advanc advancing ing you yourr prospe prospects cts throug through h educat education ion.. Then Then you accidentally stumble upon the word ‘education loans’. Loans for education – we have never thought about it as a feasible arrangement. Education loans can open newer panoramas in regard to our education aspirations. Education loans are open to all people in all its myriad forms. Education loans can realize our education plans. We can strengthen our own future with education loans. An extensive range of student and parent loans are presented under the category of education loans. There are many types of education loans. Discerning about the types of education loans will help us in making the accurate decision. The single largest resource of education loans is federal loan. The two main federal education loan programs are the Federal Family Education Loan Program and the Federal Direct Loan Program. In the Federal Family Education Loan Program the bank, credit union or the school is the lender. While the federal direct loans program, the department of education is the lender. Private education loans are offered to people so that they can provide financial backup to their education plans. Private education loans are not endorsed by other government agencies but are provided by other financial institutions. Private education loans program are optimum for both undergraduate and graduate studies. Formal education is requisite for future success. Though this is not a hard and fast rule, but education certainly helps you in gaining an upper hand. With universities getting expensive by each day an education loan will certainly give you an incentive to go ahead with your education plans. Each year while contemplating on your education plans the thought of finances almost invariably comes in. While working towards you degree, you are constantly plagued about paying for the education fees, books, and other living expenses. Education loans can provide funding for tuition fees, board and room, books computer, and even student travel. An education loan can help you with all these expenses. Education loans are sufficient enough to take care of all these expenses. If we have been forced to drop your education for any reason, we can still take up our education at any point of time irrespective of our age and also where we have left our education. There There are no specif specific ic eligib eligibilit ility y criter criteria ia for educatio education n loans loans.. Any person person who is in need need of sponsorship for education can find an education loan that befits his or her financial necessity. Loan Loan amount amount on educat education ion loans vary with with the kind of educat education ion you want want to pursu pursue. e. The repayment repayment options with education loans will similarly similarly accommodat accommodatee your personal personal financial financial prefer preferenc ences. es. We can either either repay repay intere interest st amount amount while still still in school school or six months months after graduation. Education loans offer up to ten years for repayments. The refund alternatives on education education loans also include deferment, deferment, forbearance forbearance and consolida consolidation. tion. The various various sites on education loans can give you innumerable repayment options and monetary remuneration. Education loans will help you in planning your life after graduation. However, an education loan like every loan is a huge financial obligation. An education loans is generally the first substantial loan for most people and therefore the first major expense. Do not be completely dependent on your
education loans for the funding of our complete education. Try to apply for any other financial sustenance like university grants, scholarships, fellowships, work study programs and assistance ship and any other form of aid. This will certainly encourage a fluid dispensation of our education loans. We can start by going to the financial aid office in our school or university. It will provide us further insight to the kind of education loans, we must apply for. Education is an experience of life. It is so rewarding in itself that it helps you to manage almost everything in your life.
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RESEARCH METHODOLOGY METHODOLOGY: In this research I have adopt the Exploratory Research method only for SBI, PNB and HSBC Education loan schemes for just compare the offer document of these t hese three banks.
DATA SOURCE: Primary data is taken from various internal documents and circulars issued by the banks from time to time and Secondary data is taken from different books and financial information published in newspapers and from the banks websites and other related websites.
SCOPE: Research scope is only three banks and these three banks are State Bank of India (SBI), Punjab National Bank (PNB), and Hong-Kong Shanghai Banking Corporation (HSBC).
LIMITATIONS: There are some limitations in this research; these limitations are as follows –
Time limitation
Many banks provide education loan but in this research only three banks are taken for consideration.
Expenditure on research
Some banks are not provided their internal information/circular.
STATE BANK OF INDIA (SBI) EDUCATION LOAN SCHEMES
SBI EDUCATION LOAN A term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured.
1. ELIGIBLE COURSES STUDIES IN INDIA:
Graduation, Post-graduation including regular technical and professional Degree/Diploma courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc.
Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc.
Teacher training/ Nursing courses approved by Central government or the State Government.
Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping etc. approved by Director General of Civil Aviation/Shipping.
Vocational Training and skill development study courses will not be covered under the Education Loan Scheme, as the scheme is framed to provide bank loans for higher studies.
STUDIES IN ABROAD:
Graduation/ Post-graduation for job oriented professional/ technical courses offered by reputed universities
2. EXPENSES CONSIDERED FOR LOAN
Fees payable to college/school/hostel college/school/hostel
Examination/Library/Laboratory Examination/Library/Lab oratory fees
Purchase of Books/Equipment/Instruments/Uniforms Books/Equipment/Instruments/Uniforms
Caution Deposit/Building Fund/Refundable Deposit
Travel Expenses/Passage money for studies abroad
Purchase of computers considered necessary for completion of course
Cost of a Two-wheeler up to Rs. 50,000/-
Any other expenses required to complete the course like study tours, project work etc.
3. AMOUNT OF LOAN
For studies in India, maximum Rs. 10 lacs.
Studies abroad, maximum Rs. 20 lacs
4. INTEREST RATE Base Rate 8.25 % w.e.f. 14.02.2011 SBI Student Loan Scheme Loan Amount
For loans upto Rs.4 lacs
Rate of Interest 3.75% above Base Rate, currently 12.00% p.a.
Above Rs.4 lacs and upto Rs.7.50 lacs
5.25% above Base Rate, currently 13. 50% p.a.
Above Rs.7.50 lacs
4.25% above Base Rate, currently 12.50% p.a.
(0.50% concession in interest for girl student) 9
SBI Scholar Loan Scheme
2.75% above Base Rate, currently 11.00% p.a. (Irrespective of the loan amount) (0.50% concession in interest for girl student)
5. PROCESSING FEES
No processing fee/ upfront charges
Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in the margin money
6. REPAYMENT TENURE Repayment will commence one year after completion of course or 6 months after securing a job, whichever is earlier.
Place of Study
Loan Amount
Repayment Period in Years
In India
Rs. 10 lacs
5-7
Abroad
Rs. 20 lacs
5-7
Amount
Studies In India
Studies Abroad
Up to Rs. 4 lacs
No Security
No Security
Above Rs. 4 lacs to Rs. 7.50 lacs
Third Party Guarantee
Third Party Guarantee
Above Rs. 7.50 lacs to Rs. 10 lacs(India)/ Rs. 15 lacs(Abroad)
Tangible Collateral security for full value of loan
Tangible Collateral security of suitable value of loan or third party guarantee
Rs 15 lacs to Rs. 20 lacs
___
Tangible Collateral security for full value of loan
Security
7. MARGIN For loans up to Rs.4.0 lacs: No Margin For loans above Rs.4.0 lacs:
Studies in India: 5%
Studies Abroad: 15%
8. DOCUMENTATION DOCUMENTATION REQUIRED
Completed Education Loan Application Form.
Mark sheets of last qualifying examination
Proof of admission scholarship, studentship etc.
Schedule of expenses for the specified course.
2 passport size photographs
Borrower's Bank account statement for the last six months
Income tax assessment order, of last 2 years
Brief statement of assets and liabilities, of the Co-borrower
Proof of Income (i.e. Salary slips/ Form 16 etc.)
PUNJAB NATIONAL BANK (PNB) EDUCATION LOAN SCHEMES “VIDYA LAKSHYAPURTI – EDUCATION LOAN SCHEME”
1. OBJECTIVE To provide financial support to deserving / meritorious students for pursuing education in India and abroad abroad.. The Scheme Scheme aims aims at provi providin ding g financ financial ial assis assistan tance ce to merito meritorio rious us studen students ts with with an opportunity including undertaking basic education and to the meritorious students to pursue higher, professional and technical education.
2. ELIGIBILITY Courses Eligibility: STUDIES IN INDIA:
Graduation courses – B.A., B.Com, B.Sc., etc.
Post-Graduation courses, Masters & Ph.D.
Professional courses, Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc.
Computer Certificate courses of reputed Institutes accredited to Department of Electronics or institutes affiliated to University.
Courses like ICWA, C.A., CFA, etc.
Courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc.
Regular Diploma/Degree courses conducted by Colleges/Universities approved by UGC/Govt./AICTE/AIBMS/ICMR.
Regular Degree / Diploma courses like Aeronautical, Pilot training, Shipping etc. approved by Director General of Civil Aviation/ Shipping, if the course is pursued in India. In case the course is pursued abroad, the Institute should be recognized by the competent local (abroad) Aviation/Shipping authority.
Advance Diploma in Banking Technology offered by PNBIIT, Lucknow.
Courses offered in India by reputed foreign universities.
Other courses leading to Diploma/Degree etc. conducted by colleges/universities approved by UGC/Govt./AITCE/AIBMS/ICMR etc.
Courses offered by National Institutes and other reputed Private Institutes.
Diploma courses, Diploma Leading to Degree Courses local as well as abroad and courses offered by recognized universities of repute through distance learning etc.
STUDIES IN ABROAD:
Graduation- for job oriented professional/technical courses offered by reputed universities abroad.
Post Graduation courses- MCA, MBA, MS, etc. offered by reputed universities abroad. 11
Courses conducted by CIMA- London, CPA in USA etc.
Students should approach the branch nearest to the place of residence of their parents. Interest is charged monthly on simple basis during the repayment holiday/moratorium period & concession of 1% in rate of interest is allowed provided the same is serviced regularly during study period. Punjab National Bank has tied up with Kotak Mahindra Insurance to provide life insurance cover for Student borrowers.
Student Eligibility:
Should be an Indian National.
Secured admission to Professional / Technical courses in India or abroad through Entrance Test / Merit based Selection process.
Expenses considered for Loan:
Fee payable to College / School / Hostel
Examination / Library / Laboratory fee.
Purchase of books / equipment / instruments / uniforms.
Caution Deposit / Building Fund / Refundable Deposit supported by Institution Bills / Receipts, subject to the condition that the amount does not exceed 10% of the total tuition fee for entire course.
Travel Expenses / Passage money for studies abroad.
Purchase of computers - essential for completion of the Course.
Insurance premium for student borrower
Boarding and lodging expenses in recognized Boarding Houses / private accommodations
Any other expense required to complete the course - like study tours, project work, thesis etc.
3. QUANTUM OF FINANCE Need based finance, subject to repaying capacity of the parents / students with margin and the following ceilings:
For studies in India: Maximum Rs.10.00 lacs.
For studies abroad: Maximum Rs.20.00 lacs.
4. MARGIN Up to Rs. 4.00 lacs: Nil Above Rs. 4.00 lacs:
Studies in India 5%
Studies in Abroad 15%
5. SECURITY Up to Rs.4.00 lacs: Above Rs 4.00 lacs and Up to Rs 7.5 lacs:
Co-Obligation of Parents. No Security Co-Obligation of Parents together with collateral security in the form of suitable 3rd party guarantee acceptable to the Bank Co-Obligation of Parents. Collateral Security of suitable value along
Above Rs 7.5 lacs:
with Assignment of future income of the student for payment of installments
NOTE: The document should be executed by the student and the parent / guardian.
The security can be in the form of land / building / Govt. Securities / Public Sector Bonds/ Units
of
UTI, NSC, KVP, LIC Policy, Policy, Gold, Gold, Shares Shares /Deben /Debentures tures,, Bank Bank Deposit Deposit in the
name of the student parent / guardian or any other third party with suitable Margin.
Wherever the land / building is already mortgaged, the unencumbered portion can be taken as security an II charge basis provided it covers the required Loan amount.
In case the loan is given for purchase of Computer, the same to be hypothecated to the Bank.
6. UPFRONT FEE
For Study in India – Nil
For Study abroad - @ 0.50% with a maximum of Rs. 5000/-(refundable on availment of the loan amount)
7. DOCUMENTATION CHARGES Up to Rs. 4 lacs Above Rs.4 lacs
Rs.270/- + Service Tax & Education Cess Rs.450/- + Service Tax & Education Cess
8. RATE OF INTEREST BPLR System Repayable in less Repayable in 03
Base Rate System Repayable in less Repayable in 03
than 03 yrs.
yrs. & above
than 03 yrs.
yrs. & above
i. Loan Loan upto upto Rs.4 lac lac
BPLR PLR – 0.5 0.50%
BPLR PLR - 1.00 1.00 + TP TP
BR+2.5 +2.50% 0%
BR+2.00%+ TP
ii. ii. Loan Loan over over Rs.4 Rs.4 lac lac
BPLR BPLR + 0.25 0.25% %
BPLR BPLR -0.2 -0.25% 5% + TP
BR+3 BR+3.2 .25% 5%
BR+2.75%+ TP
i. Loan Loan upto upto Rs.4 Rs.4 lac lac
BPLR BPLR – 0.50 0.50% %
BPLR BPLR - 1.00 1.00% % + TP
BR+2 BR+2.5 .50% 0%
BR+2.00%+TP
ii. Loan over Rs.4 lac
BPLR
BPLR -0.50% + TP
BR+3.00%
BR+2.50%+TP
a. Vidyalakshyapurti
Sarvottam Shiksha ** (For Existing A/Cs only)
9. REPAYMENT Repayment Repayment Holiday Holiday / Moratorium Moratorium -
Course Course period period + 1 year OR 6 months months after getting getting job, whichever whichever is earlier. The Principle and interest is to be repaid in 5-7 years after commencement of repayment. If the studen studentt is not able to comple complete te the course course within within the schedu scheduled led time, time, extens extension ion of time time for completion of course may be permitted for a maximum period of 2 years.
10. ADDITIONAL BENEFITS PROVIDED TO THE STUDENTS
A rebate of 0.50% in rate of interest permitted to women beneficiaries for loans up to Rs. 10 lac for studies in India and Rs 20 lac for studies abroad for existing as well as new girl student borrower’s wef. 08.03.2009.
Second time Education Loan can be sanctioned to the same student borrower for completion of next higher course.
Reimbursement of fee available.
11. CHECK LIST While applying for the loan, the borrower is required to furnish the following information/papers:
Loan application on Bank's format.
Passport size photograph.
Proof of Address (Permanent) / ID Proof. 13
Proof of Age.
Proof of having secured pass marks in last qualifying examination.
Letter of admission in professional, professional, technical or vocational courses.
Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned.
Details of Assets & Liabilities of parents.
In case loan amount is above Rs.4.00 lacs:
Detail of Assets & Liabilities of parents/co-obligants/ guarantors.
In case loan is to be collaterally secured by mortgage of IP, Copy of Title Deed, Valuation Certificate and Non Encumbrance Certificate from approved Lawyer of the Bank to be obtained at the cost of the borrower.
Photocopy of Passport & Visa, in case of study abroad.
Any other document/information, depending upon the case and purpose of the loan.
HSBC EDUCATION LOAN SCHEAMES
FEATURES AND BENEFITS a. Loans up to Rs. Rs. 1 crore against Residential Residential property property b. Tenor of up to 15 years Tenor Tenor of up to 15 years. c. Attractive interest interest rates Attractive interest interest rates d. Loan Components Components Loan Components: Components:
The tuition fees component can go up to 100% of the total loan amount
The lodging & boarding component is a maximum of 40% of the total loan amount
The cost of books & equipment component is a maximum of 10% of the total loan amount
The estimate for boarding, lodging expenses and also the cost of books and equipment needs to be confirmed by the concerned school. e. Margin Money Margin Money:
HSBC India can fund a maximum of 85% of the total programme fees
Upfront contribution proof of the remaining 15% of school fees must be submitted to HSBC, India prior to the disbursal
f. Currency: Currency:
The loan is disbursed in Indian rupees (INR) from where the funds are forwarded to the concerned school in U.S. dollars
The applicant / co-applicant must repay the loan in Indian Rupees (INR)
g. Fees & Charges: h. Processing fees:
1% of the loan amount applied for, subject to a minimum of Rs 5000 plus service tax. This fee is payable on application and is not refundable
Additional fees, as charged by GSLC apply. apply. (If applicable) o
A one-time administration fee of 1.75% of the principal amount plus service tax (at 10.30%, totally 1.93%) shall be collected by HSBC and payable to GSLC
o
An upfront non-refundable site usage fee of $75 is payable to GSLC via Credit Card or PayPal through the GSLC website
i. Pre-payment Pre-payment charges charges Pre-payment Pre-payment charges:
No pre-payment charge up to a maximum of 25% of the outstanding loan, once every financial year (April-March)
A pre-payment charge of 4% shall be levied for the amount in excess of 25% of the outstanding loan amount
Loan prepayment can be done only after six months from the disbursal date
LOAN AVAILABILITY Educational loans are available for studies in India or abroad. Avail of loan amounts ranging from a minimum of Rs. 50,000 to a maximum of Rs. 25, 00,000.
SMOOTH REPAYMENT
Our Equated Monthly Installments (EMIs) scheme allows for easy repayment and saves you from hassles. 15
Flexibility: Our loans are tailor-made to your needs. Opt for tenures up to 4 years for unsecured loans and 7 years for secured loans (against security of a residential property / shares).
COMPREHENSIVE COMPREHENSIVE COVERAGE
Educational loan also covers expenses for boarding and lodging.
HSBC banking benefits: Take advantage of HSBC's banking benefits; let us help you open a Savings account or avail of a debit card.
LOW INTEREST RATES Bank offer us competitive interest rates on our educational loans. Bank also gives us the option of choosing between a fixed or floating rate of interest (the floating rate option is available only in case of secured loans).
SPECIAL RELATIONSHIP DISCOUNTS We are also eligible for special discounts exclusively designed for HSBC customers (of 6 months or more).
Loans above Rs.500, 000 are available against security of residential property/shares. Loans to value ratio to be less than or equal to 50% of the property valuation.
Loans available for study at select institutes, based on their accreditation.
The interest rate on our floating rate Home loan is linked to HSBC's Mortgage Lending Rate (MLR) and any revision in the MLR would impact our interest rate. The MLR is currently 9.5%.
ELIGIBILITY To qualify for an Educational Loan, the following criteria apply: Rs.5, 00,000 per year for Salaried.
Net Income (Rs.) of Primary Applicant / co-applicant Minimum Age (in years) of Primary Applicant / co-
Rs. 7, 50,000 per year for Self employed. 18
applicant 58 or retirement age (whichever is earlier) for salaried at loan maturity. Maximum Age (in years) of Primary Applicant / coapplicant
65 for self-employed. 60 or retirement age (whichever is earlier) for PSU/government salaried employees, at loan maturity.
Minimum Loan Amount (Rs.)
500,000
Maximum Loan Amount (Rs.)
10,000,000
Loan to Value Ratio
65% upto education loan of INR 5 M, 55% for education loan between INR 5-10 M
Collateral
Residential Property. Either self-occupied or owned by either primary or co-applicant.
Location
Property must be in Bangalore, Chennai, Mumbai, Delhi (NCR – Noida, Gurgaon, Faridabad), Pune.
Primary Applicant Co-Applicant
Must be the student. Must have a co-applicant in India and can only be parents or spouse of student. Co-applicant being
considered when calculating the loan eligibility must be a resident Indian.
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FINDINGS Sl. No.
Parameters
1.
Beneficiaries
2.
Objective
Commercial
National and social
3.
Aimed At
Profit Earning
Not profit alone
4.
Margin Money
Must
Flexible
5.
Security
Necessary
Less Important
6.
Interest Rate
High
Reasonable
7.
Attitude
Rigid and strict
Flexible and liberal
Sl. No.
Basis of Difference
1.
Max. loan for studies in India
2.
Max. loan for studies in Abroad
3.
Interest Rates
4.
Repayment Period starts from
5.
Repayment Period
6.
Margin
7.
Processing Fees
8.
Security
Private Banks
Public Banks Economically affluent sections of Economically weaker sections also society
PNB
SBI
HSBC
Rs. 7.50 Lacs
Rs. 10.00 Lacs
Min. Rs. 50,000 to a Max. of Rs. 25.00lacs
Rs. 15.00 Lacs
Rs. 20.00 Lacs
Not Available
Upto Rs.4.00 lacs Upto Rs. 4 lakh 9.5% p.a +10% PTLR 10.50% p.a. service tax + 2% Above Rs.4.00 lacs Above Rs. 4 lakh education cess PTLR + 1% 11.50% p.a. One year after One year after completion of completion of course or course or 6 months after N.A. 6 months after securing a securing a job, whichever is job, whichever is earlier. earlier. In India: Up to Rs. Up to 4 years for 7.5 lacs - 5-7 years unsecured loans Above Rs. 7.5 lacs -5To be repaid in 5-7 and 7 years for 10 years years after secured loans In Abroad: Up to Rs. commencement of (against security 15 lacs – 5-7 years repayment of a residential Above Rs. 15 lacs – 5property / 10 years shares). Upto Rs. 4.00 lacs : Nil Above Rs. 4.00 lacs: Studies in India 5% Studies in Abroad 15%
Upto Rs. 4.00 lacs : Nil Above Rs. 4.00 lacs: Studies in India 5% Studies in Abroad 15% No processing fee/upfront charges Deposit of Rs. 5000/No processing for education loan for fee/upfront charges studies abroad which will be adjusted in the margin money Security Upto Rs. 4.00 Upto Rs. 4.00 lacs : No lacs : No Security Security Above Rs. 4.00 lacs : Above Rs. 4.00 lacs to Rs. Collateral Security of 7.50 lacs :Third Party Suitable value Guarantee (equivalent to 100% Above Rs. 7.50 lacs to of the amount of loan) or Rs. 10 lacs (India): Tangible co-obligation of parents/ Collateral security for full guardian / third party. value of loan.
N.A.
N.A.
N.A.
CONCLUSION On the basis of above findings and comparison among SBI, PNB and HSBC it is clearly observe that public banks have more reach, variety and and flexibility in their education loan schemes whereas private banks uses some new concepts in their offerings offerings like tailor made repayment system. system.
Maximum loan for studies in India is ranging from Rs. 7.50 lacs to 10.00 lacs and for studies in Abroad it is Rs. 15-20 lacs by public banks and in the case of private banks, they provide minimum Rs. 50,000 to a maximum of Rs. 25 lacs. Interest rates vary from 9.5% to 11.5% p.a. and PNB uses PTLR system.
All banks have same repayment facility i.e. one year after completion of course or 6 months after securing a job, whichever is earlier.
Repayment period is also vary from 5-7 year after commencement of repayment in the case of education loan is taken from public banks and it is 4-7 years on the basis of unsecured and secured education loan taken from private banks.
Margin is same in PNB and SBI i.e. i .e. Up to Rs. 4.00 lacs: Nil Above Rs. 4.00 lacs: Studies in India 5% Studies in Abroad 15%
PNB and SBI do not charge any processing fees but SBI takes Deposit of Rs. 5000/- for education loan for studies abroad this will be adjusted in the margin money.
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RECOMMENDATIONS
Banks should go for advertisement Campaign from Scratch.
Banks should try to cash its brand image.
Strong branch network should be made and staff personnel’s incentives should be increased.
Banks should increase its product line in i n education loans.
Special scheme for non-professional students as well as for professional students should be increased.
