Introduction
Hello everyone! I would like to talk to you about education loans for master’s degrees. I have taken one for Germany, but in general, this is applicable to anyone who wants to pursue their master’s abroad. I have noticed that there are very few articles or pieces of content about education loans provided by public-sector banks. So, I would like to elaborate more on this.
Union Bank Of India: Education Loan
The Union Bank of India offers the best education loan scheme called “Special Union Education Loan Schemes for Premier Institute Abroad Studies”. This loan is available only to the top 150 universities, and the list of these universities is available on their website. You can verify if your university’s name is on the list, and only then can you apply for this loan.
https://www.unionbankofindia.co.in/english/special-education-loan-abroadstudies.aspx
Loan Details
The details of this scheme are
- Loan Amount: 7.50 Lakhs – 150 Lakhs
- Security:
- Upto 40 Lakhs – No collateral security or third-party guarantee required
- Above 40 Lakhs – Security required
- Interest Rate:
Quantum of Loan
ROI
Collateral
Effective ROI
Up to Rs. 40 Lakh
EBLR + 0.50%
(Without collateral)
50% Up to < 100%
EBLR + 0.25%
100% and above
EBLR
Above Rs. 40 Lakh
EBLR + 2.00%
(50% Up to <100% Collateral)
100% and above
EBLR + 1.50%
EBLR is 9.3% at present.
- Charges:
- Processing fee – Rs. 5,000/- (fully refundable if loan is disbursed within 3 months of sanction date)
- Stamp Charges – Rs. 700/-*
- Insurance Charges – Rs. 22,500/-*
- Processing time: 1 to 2 weeks
- Loan Margin: 15% in General, 30% in case of absence of tuition fee
*Charges for me are based on my loan amount of Rs. 14.5 lakh and may vary for you. Insurance is made mandatory, which also varies with the loan amount.
Wemakescholars.com – Are they worth it?
I also approached WeMakeScholars.com, and they have been quite helpful during my loan application process. They help out in the process of getting an education loan by acting as a bridge between the student and the bank. Most importantly, they do not charge any kind of fee, and the service is completely free. Note that this is not a sponsored review. I was initially skeptical about them because I did not believe that they could charge nothing and offer a service. However, after using it, I felt good. Honestly, it did not benefit me much in terms of application or implementation, but it provided great help in terms of information and other choices. They offer backup loan options as well, in case the ongoing loan application gets rejected. On any given day, I would choose some free help over nothing. So, this is the only reason why I am recommending them to you. You can also use my referral link below and get Rs. 3000/- cashback after loan disbursement:
Start the Process for Education Loan
I have taken a two-year loan of Rs. 14.5 lakh for a master’s degree at a public university in Germany. The process is similar in other countries where there are tuition fees. Along with the applicant, the loan process requires another co-applicant who should be currently earning. My mother was the first co-applicant, and my father was the second co-applicant (I think one is enough, and the requirement of a second co-applicant varies at different branches depending on people). We Make Scholars can guide you through this. The process will be much easier if one of them is employed in the government sector. It’s also better if you open a savings bank account at Union Bank if you don’t have one.
Documents required
You will be required to submit these documents to the bank
- Aadhar, Pan, Passport Copy
- University Admission Letter
- Semester Duration and Fee Details (Screenshot of webpage of your course)
- Loan Amount Required (Blocked account) – I submitted two documents for this:
- Tuition Fee (Attach the webpage containing tuition fee. In case of German public universities which does not have a tuition fee, mention the semester contribution fee – available in webpage / student portal)
- 10th, 12th, BTech (Gradesheets, Certificates)
- Toefl, GRE (Optional. Attach if available)
- Employment letter, ID card, Pay slips last 3 months, Bank statement last 6 months, Last 2 years ITRs acknowledgement and form (Optional. In case the applicant is employed).
- Co Applicant – Aadhar, Pan
- Co Applicant – Pay slips last 3 months, Bank statement last 6 months, Last 2 years ITRs acknowledgement and form
- Co Applicant – Proof that they are residing in the given address (Electricity bill, property tax, etc. – it should mention one of their names)
Loan Application
After verifying all these documents, the loan representative handed me three forms, which I’m attaching here for your reference. You have to fill out these forms and submit them to the bank (the bank will give you these forms and will guide you on how to fill them out).
https://drive.google.com/drive/folders/1uAk9_4RzatA9QzRuYif7J-oGwxiqqQCS?usp=sharing
Steps Involved in Education Loan
After submitting the loan application, the bank sends the loan application to the local headquarters, where they process the application. WeMakeScholars.com has helped me with this by following up with the local headquarters. They also send a soft copy of the application to the headquarters, which speeds up the process. After I applied, a third-party agency came to my home to verify all the details. Also, note that there is an additional loan amount of 3 lakhs that can be offered for expenses like books, laptops, tablets, flight tickets, etc. that are necessary for studying abroad. You can get the booking guide for flight booking here. They won’t deposit this amount in the bank account, but they offer reimbursement against it upon submitting invoices. If you require this, inform your bank representative about it in the initial phase so that they will include it in the application before sending it to the local headquarters.
I also made some declarations regarding my future income and the assets I had. Within a week of following up, my loan was sanctioned. Unlike private banks like HDFC Credila, public sector banks generally do not transfer the loan amount to the student’s savings account but instead transfer it directly to the college or relevant organisation.
Loan Disbursement
Since I’m going to Germany, I have to show the Form 06 of the blocked account as proof of funds. I used Expatrio for the blocked account. In Expatrio, the payer can be oneself or someone else (and accordingly, the passport and bank details are to be entered). So, I was facing an issue: if I put myself as the payer in Expatrio, then the money would have to be debited from my account, and public banks generally do not transfer the loan money to the student’s account. If I select someone else, then I would have to provide that person’s details, such as passport and bank account number, from where the money will be sent (I would have to take the branch manager’s or a representative’s details and fill them in).
I explained this to the bank representative, and they told me that I could choose myself as the payer, and they would transfer the money to my account. I will have to keep the remaining margin amount in my account, and the bank will transfer the full amount (loan amount plus margin amount) to Expatrio, during which my account will be blocked for usage. Accordingly, I had transferred the remaining margin amount into my savings bank account, and they blocked my account for about an hour. I provided them with the details of Expatrio, and they transferred the whole blocked amount of €11,208 in one go.
That’s a wrap! I hope this information was valuable.
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