The Union Bank of India is a major government bank with approximately 9500 branches across India. Students who are seeking higher education in India or abroad can qualify for a Union Bank education loan, which offers various repayment options commencing after the completion of the course.
The education loan schemes encompass a wide range of expenses, such as college fees, exam fees, hostel fees, equipment fees, books, travel expenses, and more, specifically for students pursuing education abroad. Additionally, it covers building fund deposits, caution deposits, and any refundable deposits that may be required.
In this blog, we will mainly focus on the various Union Bank education loan schemes and thereafter proceed with the eligibility criteria, features, benefits etc.
Union Bank Education Loan Options For Students
Union Bank facilitates affordable education loans with straightforward terms, enabling a greater number of Indian students to pursue higher education. Aspiring students aiming for esteemed technical and managerial institutes can set their worries about expenses aside. The bank offers interest subsidy programmes supported by the federal government, specifically designed to assist students from economically disadvantaged backgrounds and minority communities.
- Union Education
- The Union Bank education loan interest rate for the loans ranges from 10.65% p.a. to 12.30% p.a.
- Indian students are not charged any processing fee for the loan.
Other loan details:
- For loans up to Rs.4 lakh, no collateral is required.
- Loans ranging from Rs.4 lakh to Rs.7.5 lakh require a third-party guarantee.
- Loans above Rs.7.5 lakh require tangible collateral.
- The loan tenure extends up to 15 years after the moratorium period.
- The eligibility criteria for the loan are applicable to Indian nationals.
- Union Special Education Loan Scheme
- The interest rate for this Union Bank education loan ranges from 9.05% p.a. to 10.80% p.a.
- There are no processing fees associated with the loan.
- No collateral is required to avail of the loan.
- The loan tenure is 15 years, which begins after the moratorium period.
- The loan is available to Indian nationals who have secured admission to premier educational institutions in India.
- Union Special Scheme for Tier II Management and Technical Institutes
- The interest rate for the loan ranges from 10.30% p.a. to 10.80% p.a.
- No processing fees are charged for the loan.
Other Loan details:
- For loans up to Rs.7.5 lakh, no collateral is required.
- Loans above Rs.7.5 lakh necessitate tangible collateral.
- The loan tenure is 15 years, commencing after the moratorium period.
- The eligibility criteria for the loan include Indian students who have secured admission to tier II management and technical educational institutions within the country.
- Union Education Premier Abroad
To be eligible for this Union Bank abroad education loan, the applicant must be an Indian national who has secured admission to a full-time postgraduate course at a prestigious university abroad.
Details of the loan:
- The loan amount can range from a minimum of Rs.7.50 Lakhs to a maximum of Rs.150.00 Lakhs.
- For loans up to Rs.4.00 lakh, no margin is required.
- For loans above Rs.4.00 lakh to Rs.40.00 lakh, a 15% margin is applicable.
- In cases where a minimum of 100% collateral security is provided, no margin is required, but a processing charge of Rs.10,000/- is collected.
- In other cases, a 15% margin and a minimum of 50% collateral security are mandatory.
Documents Required For Union Bank Education Loan
Securing a student loan involves a crucial step that should never be overlooked—the submission of proper documentation. When it comes to obtaining an education loan from Union Bank, the process follows a typical pattern. Now, we’ll walk you through some of the essential documents that loan applicants must prepare and submit to the bank. It’s worth noting that both students and their co-applicants have distinct sets of documents to provide.
- Academic Documents
A copy of the admission letter as evidence of admission.
Result sheets and certificates for all examinations that have been successfully completed.
A comprehensive breakdown of the course’s expenses.
Documentation confirming any scholarships, grants, or other forms of financial aid received, such as an award letter.
- KYC Documents
- Provide the relevant photo identification documents for the student, co-borrower(s), and guarantor (if applicable).
- Submit the necessary residence documents for the student, co-borrower(s), and guarantor (if applicable).
- You will need two passport-sized photos for each student, co-borrower, and guarantor (if applicable).
- If the student, co-borrower(s), or guarantor does not have a PAN card, they should be advised to apply for one. The branches can request a copy of the PAN card at a later stage.
- Gather the essential documents that demonstrate the student’s income.
- Provide income proof for the guarantor and any co-borrowers (if applicable).
- Collateral Documents (if applicable)
The Interest Rate Provided
Union Bank education loan is offered with attractive interest rates to students. For loans exceeding INR 7.5 Lakhs, the fixed interest rate stands at 12.25% p.a. However, for loan amounts below INR 7.5 Lakhs, the applicable interest rate is 12.00% p.a. In line with the Indian Government’s policy, female candidates are eligible for an additional 0.50% concession on the interest rate, making it even more favourable for them to pursue their educational goals with the bank.
Loan Disbursement Process
Government banks typically disburse student loan funds in a systematic and phased manner. The living expenses are transferred to a Foreign Travel Card, which is provided upon Union bank education loan signing and disbursement, while the tuition fees are directly credited to the student’s university account. This ensures a structured approach to managing the financial aspects of education loans.
1. What is the margin money on the Union Bank of India education loan?
For education loans up to INR 4 Lakhs, no margin money is required. However, for loan amounts exceeding INR 4 Lakhs, the margin money varies. For studying abroad, the margin is up to 15%, whereas for studying in Indian colleges, the margin is 5%.
2. How much loan can be taken from the Union Bank of India education loan?
The bank has the flexibility to approve loan amounts based on the individual student’s needs, whether they are pursuing studies in India or abroad, provided they are Indian residents. For non-resident Indians (NRIs), the maximum loan amount that can be sanctioned is INR 30 Lakhs.
3. What is the processing fee for getting this loan?
Under its education loan schemes, the Union Bank of India does not impose any processing fees.
4. What is the repayment period of the Union Bank education loan?
The repayment of the Union Bank education loan commences one year after the completion of the course. The loan repayment period extends up to 15 years for all types of loans.
5. What is the security required to be pledged for the Union Bank of India education loan?
When considering loans up to Rs.7.50 lakhs, the requirement entails the co-obligation of parents without the need for any security or third-party guarantee. However, for loans exceeding Rs.7.50 lakhs, parents must still serve as co-obligators, but tangible collateral security equivalent to the full value of the required loan amount becomes necessary.
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