Veena Sharma, an NRI, decided to leave the USA and come back to India for good. She had to leave her daughter behind as she had to complete her education. Veena’s daughter Reva called her soon after her graduation and informed her she would be coming to India for her further education, but this left Veena worried. Let us find out why.
Veena: “ I have some very good news Renu.”
Renu: “Really? What’s that?”
Veena: “My daughter just called me from the US saying she was interested in coming back to India to pursue her higher education.”
Renu: Wow! That really is great news..”
Veena: “Yes. But there is a problem. How do I finance her education, that too in an NRI quota? Isn’t it more expensive than a normal seat?”
Renu: “Relax Veena, that’s not a problem at all. With NRI education loans available, everything will be sorted.” Just go to your bank and get all the details.
Veena: “Yes you’re right. I should go and find out more information.”
Once Veena reached her bank, the bank manager sat her down and informed her about the NRI education loan. The information is explained below.
What is an NRI Education Loan?
An NRI Education oan is granted to a Non Resident Indian (NRI) for the purpose of education in any of the recognised Indian institutes. Since the tuition fee is higher than that of the normal seat, a personal loan may not be sufficient to meet the cost. This loan is granted to meet various expenses associated with education such as tuition fees, maintenance costs, cost of study material etc.
The loan amount varies from Rs 4-20 lakh for NRIs for the purpose of education.
The individual availing the loan is required to pass an entrance test conducted by the institution in order to secure admission.
The loan amount can be used to pay the cost incurred in tuition fees, entrance exam fees, library fees, uniform fees, deposit which may be refundable, miscellaneous expenses which incur in project work, dissertation etc.
Deposits may also be financed through the loan scheme
Persons eligible for the course:
a) Indian National
b) Students who have cleared the entrance examination and have secured admission for technical/professional courses.
Eligible Courses would be all technical /professional courses including certificate courses, diplomas; graduate/ Post graduate and/ or doctorate degree studies in recognised schools / colleges / institutions. (Courses in Medicine, Surgery, Dental Science, Architecture, Veterinary Science, Agri Sciences and in various branches of Engineering , Technology, Computer Science, Industrial Management, Business Administration and other Management Sciences)
- If the student gets employed within six months of completion of the course, the repayment starts immediately after completing one month from the date of joining the job.
- Repayment is generally done over a period of 60 months by way of monthly installments. The full amount of the loan is to be repaid within five to seven years once the repayment begins. In a worst case scenario, this period can be extended to a maximum of two years.
Any loan above Rs 4 lakh invites a margin of 5%. Margin is that part of the loan which is not covered by the lender and is to be borne by the student and/or parent/guardian.
- No collateral security is required for a loan below Rs 4 lakh
- Suitable Third Party Guarantee is required for a loan amount between Rs 4-7.5 lakh
- For loans between Rs 7.5-20 lakh, 100% collateral is required in the form of Immovable property / NSC / Units of UTI / LIC policy / RBI Bonds or any transferable Government securities.
Documents to be submitted
- Application (student and parent/guardian jointly)
- Passport size photos - 2 copies
- Proof of admission to course
- Details of expenses for the course
- Proof of Income of parent /guardian
- Copy of Passport of parent / guardian and student
- Testimonials or references may be required from the head of the institution and other people reputed in their field who are not related to the student.