EDUCATIONAL LOAN - ZCBL

Who can apply

Purpose

Parents / Guardian of the student need to be the applicant in case of minors.

Students who are majors: Loans to be granted with their parents / guardians as joint borrowers.
(Documents must be executed by both). Here also, only the Parents / Guardian of the student
can be the sole applicant/s of the loan.
Salaried Parent / Guardian:
Present age + repayment period should not exceed retirement age
Others:
Present age + repayment period should not exceed 65 years
The Minimum Employment for the parent / guardian should be 2 years / stable business for 3
years.
To acquire skills in any educational discipline.
a) Studies in India. (Indicative List)

School education including plus two stage.

Graduation Course : All Graduation courses
Post Graduation Courses : Masters & Ph.D.
Professional Courses : Engineering, Medical Agriculture, Veterinary, Law, Dental,
Management, Computer, Ayurveda, Homeopathy, Physiotherapy.
Computer certificate courses of reputed institutes accredited to Dept. of Electronics or
Institutes affiliated to university.
Approved courses / Evening Courses leading to graduate/post graduate degree and PG
diplomas conducted by recognized colleges / universities recognized by UGC / Govt. /
AICTE / AIBMS / ICMR etc.
Courses like ICWA, CA, CFA etc.
Courses conducted by IIMs, IITs, IISc, XLRI. NIFT,NID etc.
Regular Degree / Diploma courses like aeronautical, pilot training, shipping degree /
diploma, in any discipline etc., approved by Director General of Civil Aviation / Shipping, if
the course is pursued in India.
Courses offered by National Institutes and other reputed private institution.
Approved courses offered in India by reputed foreign universities.
Any other course which is job oriented leading to technical / professional prowess.

b) Studies Abroad. (Indicative List)

Graduation for job oriented professional / technical courses offered by reputed universities.
Post graduation courses like MCA, MBA, MS, etc.
Courses conducted by CIMA in London, CPA in USA etc.
Degree / diploma courses like aeronautical, pilot training, shipping etc provided these are
recognized by competent regulatory bodies in India / abroad for employment.

Note: Correspondence courses are not eligible to be covered.

Eligibility
Criteria

Expenses to be
considered for the
loan

Student to be an Indian National.

Student to have procured secured admission to the recognized college/ university for professional
/ technical courses through entrance test / selection process.
Secured admission to foreign university /institutions.
No minimum qualifying marks.
Fee payable to the colleges / schools / hostels.
Examination / library / laboratory fee.
Travel expenses / Passage money for studies abroad.
Insurance premium for student borrower.
Caution deposit building fund / refundable deposit supported by bills / receipts.
Purchase of books, equipments, instruments, uniforms etc.
Purchase of computer, laptop, I-pad, tablet etc., if required for completion of the course.
Any other expense required to complete the course like study tours, project work, thesis, etc.
Note: While computing the loan quantum, scholarship fees, waiver etc. available need to be
taken into account.

Quantum of
finance

Margin

Security

ROI

Disbursement

Repayment

Need based finance subject to the repayment capacity of the parents / students with margin up to
the following ceilings :
UNDER PRIORITY (i.e. upto Rs. 20.00 lacs)
(i) For Studies in India: Max. Rs. 10.00 lacs
(ii) For Studies Abroad: Max. Rs.15.00 lacs.
UNDER NON PRIORITY (i.e. above Rs. 20.00 lacs)
(i) For Studies in India and for Studies abroad: on case to case basis.
Note: The ceilings for studies in India & abroad correspond to the limits fixed by RBI for
treatment as Priority Sector Lending. However, banks may consider on merits, higher quantum
of loan on course to course basis.
Up to Rs. 5.00 lacs - Nil
Above Rs.5.00 lacs - 5% for studies in India
Above Rs.5.00 lacs 15% for studies abroad.
Note:
(i) Scholarship / assistantship to be included in the margin.
(ii) Margin may be brought in on year to year to basis as and when disbursements are made on a
pro-rata basis.
Up to Rs. 5.00 lacs No security
Above Rs. 5.00 lacs- Collateral security equal to 100% of the loan amount and co-obligation of
parent/ guardian with the assignment of future income of the student for payment of installments.
Note: The document should be executed by the student if a major & the parent/guardian.

Security can in the form of land/ building, Govt. securities/ Public Sector Bonds / Units of
UTI,NSC,KVP,LIC policy, gold, shares, bank deposit in the name of student/ parent/guardian or
any other third party FD with adequate margin.
In case, where the land/ building/ property is already mortgaged, the unencumbered
portion can be taken as security on 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.
Regarding assignment of future income of the student, bank officials are requested to obtain a
stamped letter of undertaking
Up to Rs. 5.00 lacs : At 10.90% p.a.
Above Rs. 5.00 lacs : At 12.50% p.a.
Note: Simple interest to be charged during the study period and up to commencement of
repayment including the moratorium period.
Servicing of interest during the study period and the moratorium period till the commencement of
repayment is optional.
Accrued Interest to be added to Principal amount while fixing EMI for repayment.
1) The loan to be disbursed in stages as per the requirement / demand directly to the institutions /
vendors of books / instruments, etc. to the extent possible.
2) For the first year of study, at times institutions insist that the students pay the fees immediately on
admission. As a special case, such payment, if made at the time of seeking the admission, will be
reimbursed to the students/parents against obtaining necessary proof of payment. It has to be ensured
that no undue advantage is taken on this count. The expenditure incurred by the applicant for earlier
years however shall not be considered for reimbursement.
3) For overseas courses, after the students admission is confirmed by University, expenses relating
to 1st semester/ year will be considered for reimbursement if the University demands so.
4) In case the student loanee is not in a position to secure lodging or boarding facilities with the
Educational Institutions, he/she may be allowed to make his/her own arrangement with the consent
of the institution if required, at a reasonable cost, which may be directly paid to the concerned
establishment after verifying bonafides of the same.
1) Repayment Holiday / Moratorium: Course period + 1 year or 6 months after getting job,
whichever is earlier.
2) The loan is repayable in 5- years after the above period. If the student is not able to complete the
course within the scheduled time extension of time for completion of course may be permitted for a
maximum period of 2 years. If the student is not able to complete the course for reasons beyond this
control, sanctioning authority may at his discretion consider such extensions as may be deemed
necessary to complete the course. In case the course is discontinued midway, appropriate repayment
schedule to be worked out by the bank.

Processing
Charges
Prepayment
Penalty
Insurance
Guarantor
Shareholding
Capability
Certificate :

Assessment

Documents
Required

3) The accrued interest during the repayment holiday period to be added to the principal and
repayment in EMI to be fixed.
4) Concession for service of interest during Moratorium:
The objective of the concession is to encourage borrowers to repay interest during study /
moratorium period so that borrowers liability and banks exposure is restricted to the limit
sanctioned.
The concession/rebate of 0.50% in interest to be extended / provided to all the borrowers
who repay interest debited to the account during the study period including moratorium
period regularly in time.
Interest debited in the account if serviced before next debit of interest in the account but not
later than 30 days, will be treated as regular repayment of interest.
The Rebate of 0.50% for the study period including moratorium period will be credited back
to the borrowers loan a/c when the repayment starts, if the interest is serviced in time as
defined hereinabove.
The rate of interest to be charged during the repayment period i.e. from the date when the
repayment starts till the date of final settlement, would be 0.50% less than what is stipulated
in the sanction.
5) Tenure of the Loan
Up to Rs. 5.00 lacs : 36 - 60 months
Above Rs. 5.00 lacs : 36- 84 months
No processing / upfront charges should be collected on educational loans. Bank may charge
processing fee for studies abroad at 0.50% for the loan amount.
The educational loan will not attract any prepayment penalty.

Comprehensive Insurance of assets charged to the Bank

Optional Life Insurance cover at concessional rates to the student availing the loan.
One Third party guarantee of good means and reputation acceptable to bank. (Office may relax
the surety norms on case to case basis)
Applicant/s - Max. 100 shares of Rs. 25.00 each.
Guarantor Nominal Membership
Branches can also issue the capability certificate for students going abroad for higher studies. For
this, financial and other supporting documents may be obtained from applicant/s, if required.
(Some of the foreign universities require the students to submit a certificate from their bankers about
the sponsors solvency/ financial capability, with a view to ensure that the sponsors of the students
going abroad for higher studies are capable of meeting the expenses till completion of studies).

Prior account relationship not essential. However, statement of account for last six months
should be studied to satisfy that the conduct of the account is satisfactory.

60 times of gross monthly income for salaried persons or 6 times net cash accruals for
professional and self employed. (Net Cash accruals Depreciation + Net Profit after Tax)
Maximum deductions including proposed EMI should not exceed 60% of income.
** In
case of salaried individual, office may consider to include the cash component of the applicant,
if the same is supported with documentary evidence/ letter of the employer.

CIBIL Score for the parent / guardian: Benchmark score 700. Score less than 700 reflects poor
rating and would not be considered unless backed by proper justification
** In case of salaried individual, office may consider to include the cash component of the
applicant, if the same is supported with documentary evidence/ letter of the employer.
Duly filled application form
Admission related documents, such as,
Offer letter from university / college / institutes stating details of course and admission
procedure/s.
In case of students going abroad I 20 / Admission letter, Form A2 duly filled in, Passport
copy duly attested, F 1 Visa duly attested.
Identity proof - Voter's ID card or Driving License or Adhaar Card or PAN card or any other
document as acceptable to the Bank.
Latest academic mark sheets. Work experience proof if any of the student.
Bank Account Statement (related to business/profession) for last six months.

Loan related documents, such as,

KYC documents of applicants and guarantor such as PAN card, address proof, photos.
For salaried person, copies of Salary slip for last three months, copies of Bank Account
statement (where Salary is credited) for last six months, copies of ITR & Form 16 for last
three years.
For businessman / professional, copies of Last three years Audited Profit & Loss & Balance
Sheet, ITR with Computation of Income for last 3 years filled.
A stamped declaration/an affidavit confirming that no Educational loan is availed from other
banks/ institutions for the child for whom loan is sanctioned by us and shall not avail any
educational loan from any other bank without obtaining NOC from our bank during the
pendency of our educational loan, be obtained.
No dues certificate need not be insisted upon.
No exchange on Drafts issued in favour of school or student.
ATM cum Debit card to the student on his account.
CIBIL Charges + taxes : As applicable
Valuation / Title Search Charges: As applicable
Eq. Mortgage Creation Charges : As applicable in the state.
Charges for Late Payment of EMI : Rs 500 per cheque bounce & penal interest @ 2% per
month on the overdue

Other
conditions

Freebies
Other Charges

Documentation
to be executed
by Borrower/s &
Guarantor

Common Documents for any security taken :

Stamped
Stamped Loan Application
Letter of Continuity
Letter of lien and set off by borrower & guarantor
Letter of Guarantee
Unstamped
Letter of undertaking

Any other declaration/ undertaking as per sanction letter

Loan Receipt

DP Note

Letter of Waivement

Declaration (White Form)

When Security in the form of land & building additional documents to be taken:
Mortgage Loan Agreement
Power of Attorney, duly notarized after execution.
Declaration cum Deed of Confirmation for the Creation of Mortgage, duly notarized after
execution.
Memorandum of Entry
When Security is in the form of Govt. securities/Public Sector bonds/Units of
UTI/NSC/KVP/LIC policy/Gold/SharesLetter of Pledge
Letter of Pledge
When Security in the form of bank deposit or third party deposits
Letter of Appropriation from Borrower
Letter of Appropriation from Third Party