A Comprehensive Guide to Axis Bank Education Loan

Few of the special features of an education loan from Axis Bank are an attractive rate of interest, simple documentation process, tax benefits, relatively quick loan disbursement process, a longer repayment tenure, no pre-payment charges etc. Students who apply for an education loan at Axis Bank have to apply for the loan with their parents or a guardian, who will be treated as co-applicant for the loan. For students targeting higher education abroad, Axis Bank offers the lowest cost unsecured loan option, offering up to Rs. 40 lakhs. Note that this option is only open to students who receive admits from well-reputed programs. 

Axis Bank offers both secured as well as unsecured education loans. Since the rates of NPAs in education loan are on a rise, banks ask borrowers to pledge a tangible or intangible asset against their education loan. This asset can be used by banks to repay the loan in case the borrower fails to repay the loan. Such loans are called secured loans. An unsecured education loan, on the other hand, is a loan where the borrower does not have to pledge any tangible or intangible assets against a loan. 
Axis Bank offers unsecured education loans for loan amount up to INR 40 lakh. It should be noted that higher loan amounts are only available for reputed courses. For loan amounts exceeding INR 40 lakh, Axis Bank offers secured loans by insisting on the suitable tangible collateral security of a suitable value. The loan amount in Axis Bank education loan without collateral also depends on the student’s target college.
The education loan offered by Axis Bank covers the tuition fee, cost of books, hostel charges, library subscription charges, etc.

Axis Bank does not charge any margin money for loan amount up to INR 4 lakh. For loan above INR 4 lakh for study in India, it charges 5% as margin money while for loan amount above INR 4 lakh for studying abroad, the margin charge is 15%.

The eligibility criteria are determined by the bank’s prevailing policies at the time of the loan application. However, some common eligibility criteria for applying for the education loan for abroad studies Axis Bank are as follows:

• Personal details - The applicant should be over 18 years of age. Both Indian, as well as NRI students, can apply for the loan. However, a valid passport is a must for NRI applicants.
• Co-Applicant’s personal detail – The co-applicant should have a regular source of income. Adequate documents proving this are required. 
• The academic history of a student – The applicant must have scored a minimum of 50% in his/her HSC and graduation. Other indicators of academic performance should be favourable as well.
• Target program – Axis Bank offers education loans to students who have gained admission, through merit-based selection or entrance test, to courses like Medicine, Management, Engineering, etc. at the Bachelor and Master level. The college or institute admission is being sought to must be recognized by the relevant authorities and the bank requires a confirmed letter of admission from the educational institution. The bank has categorized target higher education programs in foreign Universities into three categories. These are:
  • Prime A - This category consists of Masters programs from top Universities. Students who have gained admission to these Universities can get an unsecured loan of up to INR 40 lakh.
  • Prime B - This category includes Masters programs from other leading Universities/ colleges, as well as a few Bachelors programs. The maximum unsecured loan given in this category is INR 25 lakhs
  • Non-Prime - All courses not included in the above two categories, fall in this one.  Here, students can get a loan without collateral for an amount up to INR 7.5 lakh.

Axis Bank education loans for abroad have attractive rates of interest. The current rate of interest for unsecured education loans given to Prime A or B programs is between 11% to 13%. The exact rate depends on the profile of the student. For non-Prime programs, the rate can be higher. If the collateral is provided, the rate can be reduced. It should be remembered here that the rate is linked to MCLR. The current MCLR (Marginal Cost Based Lending Rate) is 8.8% and the reset frequency of MCLR is half-yearly.

Axis Bank requires a bunch of documents that need to be submitted with the loan application. GyanDhan provides a customized document checklist to our students so that our students do not face any problems later... Listed below are the documents without which getting an education loan from Axis Bank would not be possible. 

• For salaried student applicants, the bank requires passport size photos of the applicant and co-applicant, proof of identity (Voter ID card, driving license, Passport, PAN card or Government department ID card), most recent salary slip that shows all deductions or Form 16 with latest salary certificate, proof of residence ( most recent electricity bill, telephone bill or mobile phone bill; bank account statement or current house lease agreement), passbook or bank statement of previous six months, a photocopy of admission letter from the college along with a schedule of the fees, mark sheets of previous years (10th, 12th and Degree) and an optional guarantor form. 
• For all other individuals, the bank requires passport size photos of the applicant and co-applicant, proof of identity (Voter ID card, driving license, Passport, PAN card), Income Tax returns of the last two years, computation of income of previous 2 years certified by a Chartered Accountant, proof of residence ( most recent electricity bill, telephone bill or mobile phone bill; bank account statement or current house lease agreement), passbook or bank statement of previous six months, a photocopy of admission letter from the college along with a schedule of the fees, mark sheets of previous years (10th, 12th and Degree) and an optional guarantor form. 
• When it is time for the first disbursement of the loan amount, the bank would need a demand letter from the college; loan agreement, sanction letter and disbursement request form that is signed by the applicant and co-applicant; documents for collateral security (if applicable) and receipts of margin money that has been paid to the college along with a bank statement confirming the transaction. If the college is an overseas institute, the bank would also need Form A2 that is signed by the applicant or co-applicant. 
• For subsequent disbursal of loan amount, the bank would need a demand letter from the college; disbursement request form that is signed by the applicant and co-applicant; receipts of margin money that has been paid to the college along with a bank statement confirming the transaction; exam progress report or mark sheet or bonafide certificate from the college. It would also Form A2 that is signed by the applicant or co-applicant is the student has sought Axis Bank Education Loan for abroad study. 

Since Axis Bank is a scheduled bank, all government schemes to help students such as Padho Pardesh, CSIS, Ambedkar Scheme etc. are available when taking an education loan from the bank. 

Some of the Axis bank education loan details are as follows -

• Processing fee – Axis Bank does not charge any processing fee for loan amounts up to INR 10 lakh for studying in India. For a loan amount higher than INR 10 lakh for studying in India, the processing fee is INR 5000+ GST (non-refundable). For studying abroad, it charges a processing fee of INR 15,000 + GST (refundable) for a loan amount up to INR 20 lakh. For loan amounts that exceed INR 20 lakh for studying abroad, Axis Bank charges 0.75% of loan amount exceeding 20 lacs + GST (Non–Refundable fee). 
• Prepayment charges – Axis Bank has no prepayment charges for education loan. 
• Penal Interest on overdue or delayed EMI – Once the loan repayment commences, Axis Bank charges a penal interest of 2% every month on the overdue EMI instalment. 

If the application for the education loan is complete and all relevant documents are attached, the bank sanctions the loan in 10-12 working days.