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Education Loan in Karnataka

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Education Loan in Karnataka

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Brinda Khurana
Brinda Khurana

Study Abroad Expert

Updated on:  05 Nov 2024 | 
Reviewed By:  Aman  
| 292 | 60  min read

This blog is designed for residents of Bangalore, Mysore, or any other city in Karnataka who are looking to secure a student loan for education in India or abroad. Statistically, students in Karnataka often require approximately 15 lakh INR for domestic studies and up to 45 lakh INR for international education. Education loan interest rates  in Karnataka vary from 8.30% to 13.5%, depending on the loan type and the lending institution. More detailed information is provided below.

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Which Bank is Best for an Education Loan in Karnataka?

In Karnataka, a variety of banks offer education loans for students seeking higher education both domestically and internationally. It is recommended to carefully review the different loan options provided by these banks to select an education loan that aligns well with your educational goals and financial needs.

Leading Banks for Education Loan in Karnataka For Studies in India 

Bank Name  Loan Amount  Processing Fee

State Bank of India 

Up to INR 50 lakh

Nil - INR 10,000+Tax 

Axis Bank 

Up to INR 75 lakh (unsecured) 

Up to 2% of the amount+GST 

ICICI Bank 

Up to INR 1 crore 

Up to 2% of the amount +GST

IDFC First 

Up to INR 30 lakh (unsecured) 

Up to 1.5% of the amount 

UBI 

Up to INR 1.5 cr (secured) 

Up to INR 40 lakh (unsecured)

INR 5000 (refundable) 

HDFC Credila 

Up to INR 40 lakh 

1% + GST 

Auxilo 

Up to INR 65 lakh 

Up to 2% of the sanctioned loan amount 

InCred 

Up to INR 60 lakh

0.75% - 1% of the sanctioned loan amount

BOB 

INR 7.5 lakh - INR 1.5 cr 

1% (max. INR 10,000) 

Check Your Education Loan Eligibility

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Leading Banks for Education Loan in Karnataka for Abroad Studies

Bank Name  Loan Amount  Processing Fee

State Bank of India

Up to INR 1.5 cr with collateral 

INR 10,000

Axis Bank

Prime A - INR 1 cr

Prime B - INR 40 lakh 

0.75% on the sanctioned loan amount 

ICICI Bank 

Up to INR 2 cr (secured) 

Up to INR 1 cr (unsecured) 

Up to 0.75% TO 1% + GST 

IDFC First Bank

Up to INR 75 lakh without collateral 

Up to 1.5% of the sanctioned loan amount 

Union Bank of India 

Up to INR 2 cr (secured) 

Up to INR 40 lakh (unsecured) 

INR 5000

HDFC Credila 

Up to INR 75 lakh 

0.5% - 1% 

Avanse 

Up to INR 75 lakh 

1% - 1.5% 

Auxilo 

Up to INR 65 lakh 

0.5% - 1.5% 

InCred 

Up to INR 80 lakh 

1% - 2% 

MPower Financing

Up to 100,000 USD 

5% (adjusted in the loan amount) 

Prodigy Finance 

Up to 100% cost to study 

Up to 5%, added to loan amount*

Bank of Baroda 

Up to 1.5 cr with collateral 

INR 10,000 + GST 

*Note: Upon loan approval, students are required to pay an upfront fee of $100 to receive their sanction letter.

 

Explore Best Banks for Education Loans!

 

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What are the Documents Required for an Education Loan in Karnataka?

When applying for an unsecured education loan or secured education loan in Karnataka, it's essential to compile a comprehensive set of documents to ensure a smooth approval process. Here's a breakdown of the necessary documentation for applicants, co-applicants, and guarantors:
 

Basic Documents Required

  • list items Completed Application Form: Filled out with the applicant's details and accompanied by two passport-size photographs.
  • list items Proof of Residency:
    • Passport, voter ID card, electricity bill, telephone bill, ration card, bank account statement, or Aadhar card.
    • Two different proofs are required if the applicant’s permanent and current addresses differ.
  • list items Identity Proof: PAN card and passport.
    • PAN card and passport.
  • list items Personal Asset and Liability Statement: Provided in a format specified by the lending institution.
  • list items Bank Statements: Most recent six-month bank statement (personal/salary). For self-employed co-applicants, one year's worth of business transactions must be documented.
    • Most recent six-month bank statement (personal/salary).
    • For self-employed co-applicants, one year's worth of business transactions must be documented.
  • list items Self-attestation: All documents must be self-attested.

    •  

    Academic Documents for the Applicant

  • list items Proof of Admission: Enrollment details evidencing the total course duration.
  • list items Course Fee Structure: Including, if applicable, the i20 form for studies in the USA.
  • list items Standardized Test Scorecards: GRE, IELTS, GMAT, etc.
  • list items Educational MarkSheets and Certificates: For 10th, 12th, and any degrees obtained.


    • Financial Documents for Co-applicants

  • list items If Salaried: Recent pay slips (last 3 months). Form 16 for the previous two years. Employer's ID card. Income tax returns (ITR) for the last two years.
    • Recent pay slips (last 3 months).
    • Form 16 for the previous two years.
    • Employer's ID card.
    • Income tax returns (ITR) for the last two years.
  • list items If Self-employed: ITR for the past three years. Profit & Loss account and balance sheet for the last three years. Proof of business address.
    • ITR for the past three years.
    • Profit & Loss account and balance sheet for the last three years.
    • Proof of business address.

     

    Other Required Documents

  • list items Processing Fee: A cheque for Rs. 11,800.
  • list items Co-applicant Support Letter: A letter affirming the co-applicant’s responsibility for costs not covered by the loan.
  • list items Legal and Valuation Fees: Additional cheques if the bank handles legal and valuation processes.
  • list items Affidavits: From property collateral owners on Rs. 20 or Rs. 100 stamp paper; required from all owners if the property is jointly owned.
  • list items Additional Documentation:
    • Statements for any existing loans.
    • Receipts for any advance payments.
    • Proforma invoice for additional loan purposes like travel or equipment.
    • If applicable, a letter explaining the absence of a co-applicant's ITR.
    • A letter detailing any gaps in your academic or employment profile.

     

    Gathering and organizing these documents meticulously can help expedite the loan application process and increase the likelihood of approval.

     

    Avoid Loan Letdowns: Know What Knocks Your Education Loan Off Track!

    Calculate your Education Loan EMI

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    What are the Required and Acceptable Collateral Documents to Avail an Education Loan in Karnataka?

    When securing a secured education loan in Karnataka, it's crucial to prepare and submit the appropriate collateral documents. These documents are vital for verifying the ownership and legality of the assets used as collateral. Below is a detailed breakdown of the required documents and information about acceptable collaterals:

     

    Required Collateral Documents

     

    1. Property Title Deed: The legal document proving ownership of the property.
     

    2. Legal Instruments: Includes a registered Will, Sale Contract, or Gift Deed.
     

    3. Initial Registration Receipt: Proof of registration for the above-mentioned agreements.
     

    4. Municipal Allocation Letter: Confirmation from the local municipal corporation regarding the allocation.
     

    5. 30-Year Chain of Title Documents: Essential for establishing a clear title, showing property transactions over the past 30 years or the previous sale document if the property has been held for over 30 years.
     

    6. Recent Property Tax and Electricity Bills: Ensuring these are from the same address to confirm ongoing liabilities and utilities status.
     

    7. Approved Building Plan or Plot Layout: Copy of the plot layout or building plan approved by the municipality.
     

    8. Acceptable Collaterals for Education Loans in Karnataka

  • list items Residential Properties: Houses, flats, or non-agricultural land with clear boundaries.
  • list items Commercial Properties: Accepted by some banks, depending on the lender's policies.
  • list items Agricultural Land: Usually acceptable, subject to certain bank-specific conditions.
  • list items Financial Securities: Includes fixed deposits (FDs), insurance policies, and government bonds.

    • Understanding Property Classifications in Bangalore

  • list items A Khata Properties: Fully legal properties with all taxes paid. Accepted universally for education loans in Bangalore.
  • list items B Khata Properties: These properties violate certain building bylaws or have pending tax payments. Some private banks might accept these with District Commissioner (DC) conversion.
  • list items E Khata Properties: Represents electronic records, allowing online tax payments. Mostly accepted in some government banks, dependent on individual cases.

    •  

    Documents for B to A Khata Conversion:

     

    1. Apply for DC Conversion: For converting agricultural land for non-agricultural purposes.
     

    2. Clear Property Taxes: Ensure all dues are cleared as per government norms.
     

    3. Obtain and Fill Khata Form: Available at the BBMP office, requiring detailed property information.
     

    4. Payment of Conversion Fee: Pay the necessary fee to BBMP for converting B Khata to A Khata.
     

    5. Submit Documents: Include the tax receipt, filled-in form, and required documents to the Assistant Revenue Officer of the area.
     

    Conversion typically takes 4 to 6 weeks post-submission. Ensuring these documents are correctly filled out and submitted will help streamline the loan application process, reducing delays and potential complications.

    Check Your Education Loan Eligibility

    Click Here
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    Education Loan Interest Rate in Karnataka For Studies in India

    Bank Name  Interest Rate  Interest Rate Concession 

    State Bank of India 

    Starts from 8.30% 

    0.60% Business strategy discount 0.50% - for female students 

    0.50% - Rinn Raksha 

    Axis Bank 

    Starts from 11.5% 

    0.5% - 2% 

    ICICI Bank 

    Starts from 10.5% -11% 

    0.5% - 2% 

    IDFC First 

    Starts from 8.5% - 10% 

    0.5% - 2% 

    UBI 

    Starts from 11.15% 

    0.5% for female students

    1% if the SI is paid in full 

    HDFC Credila 

    Starts from 10.25% - 12.75% 

    		 -

    Auxilo 

    Starts from 11% - 13.5% 

    0.5% - 2% 

    InCred 

    Starts from 11% - 13.5% 

    0.5% - 2% 

    BOB 

    Starts from 8.85% 

    0.5% 
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    Education Loan Interest Rate in Karnataka For Studies in Abroad 

    Bank Name  Interest Rate  Interest Rate Concession 

    State Bank of India 

    Starts from 10.15% 

    0.5% concession in interest for female students 

    0.5% - Rinn Raksha 

    Axis 

    9.99% - 12.5% 

    		 -

    ICICI 

    10.25% - 12.5% 

    		 -

    IDFC First 

    9.5%-11% (secured) 

    11%-13% (unsecured) 

    		 -

    UBI 

    9.25% - 9.75% 

    		 -

    HDFC Credila 

    10.25% - 12.75% 

    		 -

    Avanse 

    10.75% - 13% 

    		 -

    Auxilo 

    11.5% - 13% 

    		 -

    InCred 

    11.85% - 13.25% 

    		 -

    MPower 

    12.99% - 15.99% 

    -

    Prodigy 

    11.5% - 13.5% 

    -

    BOB 

    9.7% (fixed) 

    0.20% concession in interest for female applicants of non-premier institutes

    Verify your eligibility for an education loan with GyanDhan today! Simply visit the GyanDhan website, use their loan eligibility tool, and receive instant feedback on your options. 

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    What is the Eligibility Criteria to Avail an Education Loan?

    To qualify for this education loan scheme, applicants must meet specific eligibility requirements:
     

    1. Parental or Guardian Representation: A parent or guardian must act as the co-borrower for students who are minors, ensuring legal and financial responsibility.
     

    2. Joint Loan Agreement: The loan will be issued in the names of both the student and the parent/guardian, linking both parties to the financial commitment.
     

    3. Admission Through Merit: The student must have secured admission to a recognized institution either in India or abroad, based on merit through a competitive selection process.
     

    These criteria are designed to ensure that the loan is used for legitimate educational purposes and that there is adequate financial backing to support the student's academic journey.

    Top Benefits of Education Loans—Learn How They Can Empower Your Academic Journey! 

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    Conclusion

    In conclusion, securing an education loan in Karnataka requires careful consideration of various factors, including choosing the right bank, understanding the loan terms, and ensuring eligibility criteria are met. Prospective borrowers need to meticulously prepare and submit the necessary documentation and meet the banks' credit and academic performance standards. Additionally, selecting an appropriate course and study destination is crucial, as these significantly impact loan approval. With proper planning and understanding of the common reasons for loan rejection, students can enhance their chances of securing the necessary funding to advance their education, either in India or abroad. By addressing these key aspects, students can navigate the complexities of obtaining an education loan, ensuring they are well-equipped to pursue their academic goals without financial constraints.

     

    In Karnataka and exploring education loan options? GyanDhan is your go-to platform, offering a pathway to secure financing for your higher studies in India or abroad. Our education loan experts help you in securing high loan amounts under favorable terms with a track record of higher loan approval rates. We also assist with pre-visa loan disbursement, crucial for your visa application. Best of all? Our expert, end-to-end service comes at absolutely no extra cost to you. Check your loan eligibility on GyanDhan now and take the first step towards realizing your academic dreams.

     

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    Frequently Asked Questions 

    What expenses are covered by education loans in Karnataka?

    Education loans typically cover college tuition fees, accommodation costs, examination fees, library and laboratory fees, cost of books, and other miscellaneous academic expenses. For students studying abroad, the loan may also cover flight tickets and mandatory insurance costs.

    Can I apply for an education loan in Karnataka if I plan to study abroad?

    Yes, many banks in Karnataka offer education loans for students planning to study abroad. It is important to check with specific banks as they may have different terms and requirements for loans aimed at international education.

    What is the loan margin in education loans offered by Karnataka banks?

    The loan margin typically varies between 5% and 10%. This means the student must finance 5% to 10% of the total education cost themselves. Public sector banks usually require a 10% margin, while private sector banks may vary.

    What happens if I fail to repay the education loan?

    Failing to repay an education loan can lead to legal action, damage to the borrower's and co-borrower’s credit scores, and potential loss of the collateral. Banks typically offer options for restructuring the loan repayment schedule if borrowers face financial difficulties.

    Can education loans cover part-time or distance education courses in Karnataka?

    Yes, some banks offer loans for part-time and distance education courses. However, the availability and terms of such loans may vary, and they typically require the course and institution to be recognized and accredited.

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