PATNA: Going abroad for higher studies is a trend fast catching up in the state. Studying in a foreign country may lighten one’s purse by anything above Rs 10 lakh per annum, however it’s not a deterrent for those aspiring to go beyond seven seas. For, they get a helping hand from banks, which in recent years have eased up the process of giving education loans.
“Barely a few years back, two or three students used to turn up for education loans to study abroad. The number swelled to 15 this year, twice than last year,” said Rajiv Ranjan, assistant general manager, Punjab National Bank (PNB). SBI was approached by 61 students this year, against around 50 last year.
Courses like MBA and PG diploma in various branches of management, engineering and medicine offering great career opportunities are the most preferred choices among students in the city.
“The US and UK are the hottest destinations for career-oriented students,” said Prabhat Kumar, assistant general manager, SBI.
Pushpak Kumar, a passout of Delhi Public School, Patna, who is going to City University, London for MBA said, “I chose UK as MBA is a one-year course there. This would not only be a time saver but also give me an edge over others.”
Australia and Germany are the popular destinations among those interested in medicine. According to PNB’s Ranjan, five students out of 15 who approached the bank for loan, have opted for medical studies.
Sanjeev Kumar, who is going to do software engineering course from University of East London, said, ” Foreign degrees are still confined to the kith and kin of ‘nawabs (haves)’, as banks offer loans on the basis of family income or collateral matching the amount of loan.”
Banks like SBI, PNB, and HDFC Bank ask for either a third party guarantee or collateral for loans above Rs 4 lakh. And if the loan amount is above Rs 7.50 lakh, tangible collateral security (residential property, fixed deposit, LIC/NSC/KVP) matching the amount of loan is mandatory.
“There is special scheme for low income group with annual income below Rs 4.5 lakh,” said Prabhat of SBI, adding, “wherein government pays the interest during the study period.” PNB offers 1% rebate in interest if it is paid by the parents during the study period.
“The maximum period a student gets for repayment of loan is seven years,” Pushkar Gupta, corporate communications, HDFC Bank, Mumbai, told TOI. This tenure is same for most of the banks.
The education loans for overseas universities cover the fees payable to college/university, tuition fees, hostel fee, examination fee, library fee, purchase of books/equipment, any security deposit and the purchase of computer. Banks also pay for travel expenses.
The rate of interest charged by banks per annum varies. SBI charges 13% interest per annum for loans up to Rs 4 lakh, 14.5% for loans between Rs 4 lakh and Rs. 7.50 lakh and 13.5% for loans above Rs 7.50 lakh. While PNB uniformly charges 13.25% on all loans, irrespective of their size, HDFC Bank’s interest varies between 11.5% and 14% per annum. Some banks also offer half-a-per cent lower rates to girls.
Most of the banks, including SBI and HDFC Bank, provide loans up to a maximum of Rs 20 lakh. However, PNB has no ceiling for education loans.