Bank of Baroda Education Loan Disbursement Process

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The education loan process may seem like a work of smoke and mirrors because of the long, complex, and tedious process involved. However, we understand the confusion among students and parents, and therefore, try to give you the lowdown.

In this blog, we will take you through the Education loan disbursement process by Bank of Baroda (BOB) & other important details about the BOB Education loan.

What is the difference between loan sanction and loan disbursement?

A loan sanction letter is issued by the lending institution to the applicant. It is a proof that the applicant is eligible to get a certain amount of loan, that is the sanctioned amount from the borrower, and includes the tenure of the loan repayment, applicable interest rates, the validity period of the sanction letter, applicable EMI, and terms and conditions of the lender. 

Loan disbursement, on the other hand, refers to the transferring of funds to your loan account and then to the university/forex card/your account.

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What steps are to be taken before the Bank of Baroda disbursement process?

The Bank of Baroda education loan process has multiple steps. The steps would become easy if the loan is applied via GyanDhan. 

1. Apply for the education loan. You can do it online on our portal. 
2. Collect the required documents. On applying via GyanDhan, it becomes easy as we provide you with a customized document checklist. Moreover, we will schedule an appointment with an officer/representative to get those documents picked up from your doorstep and sent to Special Mortgage Stores (SMS) set up by BOB. Special Mortgage Stores offer end-to-end services including fast-track loan service, making the process easier and faster than that at the branch. For optimum service, you should choose the one that is nearest to you. 
3. The documents are verified and a refundable processing fee of INR 10,000 + GST is charged by BOB. 
4. Next is the evaluation of the property pledged as security by the applicant. GyanDhan coordinates to send the property documents to the lawyer for verification. A sum of INR 7,500 is charged for evaluation by a lawyer. Along with this, the applicant's address and details are also verified. GyanDhan ensures this happens in the minimum time possible. 
5. The loan amount is calculated. 
6. If the loan is approved, the bank will generate a sanction letter with details such as documents to be submitted, terms and conditions, validity, etc. The BOB education loan sanction letter is issued by the same branch chosen by you initially. 
7. The applicant needs to convey beforehand if they require pre-visa disbursement. 

What are the documents required for BOB education loan disbursement?

Once the loan is sanctioned, the applicant has to sign the agreement.

Disbursement of the loan requires another set of documents and at least a month’s time. To complete the disbursement formalities, there are some common documents to be submitted - 

• Security Post Dated Cheques (7 cheques)
• NACH - National Automated Clearing House form for ECS activation
• Fee remittance account details
• Stamp papers - stamp duty charges to create a mortgage on the property. This has to be brought by the customer itself. GyanDhan will help with document-checklist to make this step easy. 

Other documents could be related to property/collateral. 

Once the documents are submitted, the loan officer will draw up a loan agreement on the stamp paper, which the applicant will sign.

This agreement will include conditions of the loan, repayment schedule, collateral details, university, and course details, as well as any penalty in the case of non-payment of EMIs. 

What is the BOB education loan disbursement process? 

After the loan agreement is drawn up and signed, the education loan disbursement process in BOB can happen in a number of ways as per the customer’s instructions.

• Case 1 - Fees paid after disbursement - In case there is no margin money on the sanctioned loan, the tuition fee will be transferred as per the fee demand letter submitted by the applicant from the university. In the case there is margin money on the sanctioned loan, the bank transfers the entire fee along with the margin money. This margin money is deducted from the customer’s account simultaneously. 
• Case 2 - Fees paid by the customer before disbursement - Tuition fee reimbursement - In case there is no margin money, the entire fee as per the fee receipt will be transferred to the savings account linked to the loan account. In case there is margin money, the branch will reimburse the tuition amount as per the fee receipt to the savings account linked with the loan account after deducting the margin money. 

For Living Expenses, the branch transfers the amount in the Forex-cum-debit card. This is done upon the submission of the proof of living expenses such as lease agreement. If the customer has already paid the expenses, he/she can avail reimbursement. Again, the amount will be transferred to the savings account linked with the loan account. 

Exceptional Case of Pre-Visa Disbursement 

Banks can offer pre-visa disbursal, if required and specifically requested by the customer. Bank of Baroda offers this service to all the countries. To avail this service, the customer has to inform the Special Mortgage Store (SMS) in writing regarding the pre-visa disbursement requirement. 

As mentioned earlier, applying for an education loan via GyanDhan comes with assistance and guidance at every step. Our education loan counselors will be at your disposal and will help you through any obstacle you face ensuring you get your loan in a timely and hassle-free manner. 

What are the perks of BOB Education Loan? 

Bank of Baroda offers ‘Baroda Scholar for Study Abroad’ Education loan for students who wish to pursue technical and professional courses from abroad universities. The loan product has many benefits for students such as nil processing fees, high-value loans, and long loan tenure. The bank has divided the institutes into two lists - Specified List of Premium Institutes and Unspecified List of Premium Institutes and covers full-time postgraduate courses and diploma courses. Based on the list, the bank offers a secured education loan to students for up to INR 80 lakhs. The most distinctive feature of the loan is that the processing fee of INR 10,000 is refunded on the first disbursement of the loan amount. The students will only have to bear the one-time evaluation charges of INR 7,500. 

Another favorable feature of the loan is that margin money is nil for the colleges in the Specified List i.e. the bank will fund the entire cost of your education irrespective of your loan amount. For a college from the Unspecified List, the margin money is 10%. To know how banks calculate margin money, read this blog. 

What Expenses Does BOB Education Loan Cover?  

• Fee payable to College/University/Hostel/Mess charges
• Examination/Laboratory/Library fee
• Purchase of Books/Equipment/Instruments/Uniform
• Personal Computers/Laptops
• Travel expenses/Passage money (to and fro)
• Any other expenses required to complete the course - study tours, thesis, project works, etc.