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A guide on Federal Bank education loan for abroad studies including interest rate, eligibility, documents required & how to apply. Check expenses covered to study abroad under Federal Bank education loan.
Getting an education loan from Federal Bank makes sense for two reasons; banking in India has been in steady growth for the past years and private sector banks have shown significant growth to be the market shareholders, according to the RBI’s Report on Trend and Progress of Banking in India 2021 - 22. Federal Bank is a prominent private-sector bank with 1.40 Crore customers. Regarding education loans, the bank has specialized offerings under its education loan schemes to help students study abroad.
Additionally, accessibility is a great factor favoring Federal Bank for students. Most of its branches out of the total 1,282 are located in semi-urban areas (685), followed by rural (233), metro (207), and urban (157) areas. These are good reasons to think of applying for an education loan from the Federal Bank to study abroad.
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Before we dive deep, an overview of Federal Bank education loans to study abroad will give you a big picture to organize and connect the data in the blog sections. Federal Bank education loans are mainly secured education loans, and unsecured loans are limited to a small amount (see the difference between secured and unsecured education loans if you are new to the terms).
See the table below and check whether the education loan products by the Federal Bank align with your study abroad goals:
Maximum amount | INR 20 Lakhs - 1 Cr |
---|---|
12.55% onwards |
|
Processing fee |
0.25% of the loan amount (maximum INR 2,500) |
15% for above INR 4 Lakhs, nil for up to INR 4 Lakhs |
|
Documentation charges |
INR 500 - 5,000 (for INR 2 Lakhs - 1 Cr) |
Course period + 6 months -1 year or 3 months after getting a job, whichever is earlier |
|
Repayment during the moratorium period |
May be required or not, depending on the loan scheme |
Loan tenure |
10 -15 years excluding the moratorium period |
Guardian for the loan |
Close family members - parents, siblings, spouse, etc. |
Pre-closure charges |
3% of the loan amount |
Delayed-repayment charges |
2% per month of the overdue portion |
If you are satisfied with the terms of Federal Bank education loans, let’s explore the education loan schemes by Federal Bank.
Federal Bank education loans for abroad studies are provided through two schemes, namely Special Vidya Loan and Federal Career Solutions Loan. Details of Federal Bank loan schemes are given below:
In the Special Vidya Scheme, education loans from Federal Bank can be availed for higher studies in India and abroad. Take note of eligible courses; you may study degree, diploma, or any course except vocational training and skill development study courses. Other features of the scheme include the following:
Federal Career Solutions Loan scheme helps you to fund higher education for courses such as pilot training, skill up gradation, diploma or degree courses offered in aviation, hospitality and travel management, executive development etc.
Get the Funds you need to Study Abroad
From June 2023, Federal Bank education loan interest rate is 12.55% onwards. The interest rate is calculated as the sum of the Repo rate and Spread. The repo rate is the interest rate determined by the RBI to lend money, and Spread is decided by the individual banks based on the difference in the interest rate for deposits and lending.
Federal Bank has set eligibility requirements for education loan schemes to streamline the administrative burdens and manage the risks associated with each application. The eligibility criteria for education loans to study abroad are slightly different for Federal Bank loan schemes, as you can see in the sections below:
Documentation is crucial in your education loan application as the documents prove your credibility. The lender evaluates the documents and decides your eligibility for an education loan. Here is the concise list of documents required to apply for an education loan from Federal Bank:
As the major point of taking an education loan is covering your expenses, see the expenses covered by Federal Bank education loan and decide whether it satisfies you or not. The funds for studies are released initially for admission expenses, followed by regular disbursements on each semester of study.
Check Your Education Loan Eligibility
You can apply online or offline for education loans to study abroad. To apply online, you have two options: first, visit the official website of Federal Bank and redirect to the contact section to get in touch with the bank via email or a phone call. The second option is applying for an education loan via the Vidya Lakshmi portal.
To apply offline, you can visit the nearest Federal Bank branch with the required documents. The bank will verify your application and let you know the next steps if the application is accepted.
In short, Federal Bank can be your companion for education loans of its affordable loan products. However, if your aim is finding the most affordable education loan, your exploration must not be limited to Federal Bank. Consider the following situations:
As a matter of fact, the best education loan for your profile can be found only after a series of explorations, filterings, and selections based on various factors such as the loan amount, interest rate, margin money, collateral requirement, etc. In your exploration, consider taking help from GyanDhan, India’s first study abroad marketplace for students. Here’s an aid to check your education loan eligibility right now.
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The maximum amount of education loan from the Federal Bank varies for different schemes. It is INR 20 Lakhs for the Special Vidya Loan scheme and INR 1 Cr for the Federal Career Solutions Loan scheme.
The interest rate for student loans at Federal Bank depends on various factors in your application, such as academic scores, collateral value, etc. It is determined based on the RBI Repo rate and Spread. Currently, the interest rate for Federal Bank education loans is 12.55%.
Federal Bank is a popular private sector bank in India with 1,284 branches in cities and rural areas. As per the latest reports, the bank has 1.4 Cr customers in India, making Federal Bank one of the popular banks in India. The bank offers study abroad education loans under two schemes covering popular degree or diploma courses and vocational training and other courses.
Federal Bank offers better interest rates than NBFCs in India for education loans. The interest rate is currently 12.55% yearly. The interest rate for Federal Bank education loan is calculated as sum of Repo rate plus Spread, and it is calculated based on market conditions.
Federal Bank has branches in 24 Indian states, Delhi NCT, and 4 Union Territories. The states in India where Federal Bank does not have any branches are Manipur, Arunachal Pradesh, and Sikkim.
Applying for an education loan from Federal Bank is easier if you have the required documents, as the bank offers online and offline options to apply. To apply online, visit the official website of Federal Bank and follow the guidelines. You can apply offline by visiting the nearest branch of Federal Bank with required documents.
The documentation charge for Federal Bank education loans is determined upon the loan amount. There is no documentation charge for education loans of up to INR 2 Lakhs and for higher amounts the documentation charge is as follows:
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