State Bank of India - Study Abroad Education Loan Process

The State Bank of India (SBI) established in the year 1806, is the oldest commercial bank in the Indian subcontinent. It is also one of the leading nationalized lenders for overseas education loans in the country. An SBI Education loan is the go-to option for most of the overseas education aspirants as it offers various benefits. 

There are 5 types of SBI Education Loan Schemes. Those are SBI Scholar Loan Scheme, SBI Skill Loan Scheme, SBI Takeover of Collateralised Education Loan Scheme, SBI Student Loan Scheme and SBI Global Ed-vantage Scheme. 

In this article, we are going to take you through the two types of loan services offered by SBI.

To have a better understanding let’s first have a look at the cost of education for masters in UK.

• SBI Student Loan Scheme
• SBI Global Ed-vantage Scheme
  
  

SBI Student Loan scheme is availed by the students to study in India where as SBI Global Ed-vantage loan scheme is availed by the overseas education aspirants to fund their international degree. 

The classification of the loan service is done based on the factors like quantum of finance, margin amount, rate of interest, applicable charges, and interest. 

Which scheme is recommended for candidates who wish to pursue their higher education abroad?

SBI Global Ed-Vantage loan is the recommended for abroad education. However, if the project cost of the student is less than 20 lakhs, he/she can opt for SBI Student Loan Scheme. 

Now, let us know about the expenses covered in SBI education loan:

• Tuition fees of the university / college, examination fees, library, and lab fees
• Expenses of on-campus and off-campus accommodation including mess expenses
• Air Ticket Fare
• Student Health Insurance 
• Purchase of books, equipments, uniform
• Purchase amount of laptop
• Any other expenses required to complete the course like study tours and project work

Majority of the students go for SBI education loan schemes due to the numerous benefits it offers. Let us know what those are.   

Although the processing fee for SBI education loan scheme depends on the pledged collateral however there are some charges that students are required to pay. Let us know about those:

What are the charges involved in whole loan process? 

To get the education loan sanctioned, a student is required to pay certain charges for valuation report and search report. Let us understand the complete process and the applicable charges. 

• Once the loan file is submitted in the local branch, it is then forwarded to the architect for valuation and to the lawyer for search report. Valuation of the property costs around 1800/- whereas applicable charges for search report is 4000/-   
• After the sanctioning of the loan, a student must pay the processing fee of Rs. 11800/-  
• Mortgage process begins after getting the visa. Student must pay 0.20% for stamp duty against the loan amount sanctioned. 
• Students are required to avail loan insurance from the bank. The loan insurance charges are required to be bear by the parents.  

Understand the step-by-step process of SBI Education Loan: 

Step 1: Collecting all documents as per SBI loan checklist 

Step 2: Evaluating property documents and checking academic, financial documents 

Step 3:  Filling up the SBI loan application 

Step 4: Submission of loan file to nearest SBI branch 

Step 5: SBI Branch will forward loan file to zonal office/RACPC Office 

Step 6: Initiate process for search and valuation report  

Step 7: Actual processing & sanctioning after receiving both the reports 

Step 8: Receiving the loan sanction letter 

Step 9: Initiate property mortgage process

Step 10: Disbursement of the loan as per the VISA norms

Step 11: Laptop expenses, VISA fees, Air fare to disburse after approval of VISA 

List of documents required for SBI education loan scheme:

While submission of the documents in the SBI bank for processing of the education loan, students are required to carry one set of xerox documents along with the original academic and KYC documents. 

• Offer Letter stating tuition fees
• Student academic documents (10th to graduation) 
• Student employment documents if any
• KYC documents to be submitted by applicants as well as co-applicants
• Electric Bill as proof of residence in the name of co-applicant 
• Student, co-applicant’s saving account bank statement – 6 months 
• Income Tax Returns of last 2 years 
• Collateral property documents 

Now, let us understand the types of collaterals on which a SBI education loan can be availed: 

For secured education loan, there are two types of collateral that are accepted by the SBI for overseas education loan. They are Immovable assets and Movable assets. 

To pledge an immovable asset against the loan amount, it should be located within the city limit area i.e., it should be an urban property. Education loan is not availed on the collateral coming under the rural area. Here are some of the important points to know about immovable and movable assets: 

Immovable Assets 

• Immovable assets include an independent house, a flat, an open plot and a shop.
• 75% of the amount gets sanctioned against the market value of the property. 
• The value of security should be taken as per valuation report. The collateral value is evaluated by authorized property evaluators and is generally lower than the market value but in compliance with the government rules and regulations of property evaluation. 

Movable Assets

• Movable assets include fixed deposits, LIC policy, government bonds and mutual funds.
• Security offered for Fixed Deposit with Banks is 90% of total amount.
• Security offered for Government Securities for Public Sector Bonds is 25% in bank’s favour.
• Security offered for shares and debentures is 50% in bank’s favour.
• Security offered for LIC policies is 100% surrender value of the policy.

Here is a list of documents required to submit for availing collateral loan against the property: 

A student is required to provide one set of xerox documents to the bank. To initiate with the search report, a student should carry original property documents for cross verification. The documents should be in the name of the present property owner and they should not be laminated.