ICFAI Business School (IBS) Student Community

[vikas.d.goel (-=hidden=-)]

Helo seniors!plzz tell me how difficult is it to get a scholarship at ICFAI and which Bank is best for taking a educational loan.

[abhishek1711 (shah)]

by loan scholarship if u mean 1lac loan from icfai thn u need to apply along with req documents at end of 2nd sem

if u meant scholarships thn u can get thm for first two sems - not very difficult - just be in the top 25% of ur batch and fulfill some other basic criterea's

Bank Loan - since icfai has tie - up with some of the banks like sbi , obc etc the loan process is much more simplified specially if u go for an amnt less thn 4Lacs. i took loan of 6Lacs from OBC without any issues....easy processing but thn this depends on nature of the bank manager !

some make lif hell for u. so go to banks which have a tie up and getting a loan isnt really an issue if u have ur documentations in place

[karthik (-=hidden=-)]

well frnz there is a problem in some banks like the manager complaining "the university doesnt have recognition etc...and demanding a collateral security !!!!"

i dont think it shud be any easy process with sadist managers like these as abhi mentioned above

[vikas.d.goel (-=hidden=-)]

I completely aggree with this,everytime i go to a bank they give me new excuse as to why they can't sanction me a loan...and when evrything failed they told me that that they donn give loans to institutions which are not approved ny AICTE.

[adityakarnik (adityakarnik)]

Education loans

There is fierce competition to finance just about every activity of your life – be it buying a house, planning a vacation, lifestyle related expenses, insurance or your child’s education.

Though these options may seem viable, you should not lose sight of the fact that these are all a part of the ‘Great Indian Debt Trap’ where you end up committing your future earning towards your expenses every month.

The good part is that it helps you in funding your child’s education expenses because you did not plan saving for their education appropriately at the right time. Nevertheless the bottom-line is good education for your child.

But let's pause and look at the flip side. Here are some points to ponder before you think of education loans.

Interest Rate Risk:

Education loans are available with two options: Fixed Rate of Interest and Floating Rate of Interest. Most banks offer the floating rate option only.

Some banks that offer Study Loans

Andhra Bank
State Bank of India
Allahabad Bank
UCO Bank
Bank of India
HDFC Bank

Floating rate has revision cycles which differ from bank to bank. It can be a monthly, quarterly, half yearly or yearly reset option. When interest rates move higher you end up paying a higher amount of EMI, or else, the tenure of your loan gets extended.

Consider a few important points, and how these will affect you before you take an education loan:

1. When will the interest rate change?
Interest rates will changes at a fixed period of time and this is referred to, as the Review Date, and is specified when you sign the loan agreement. Typically, it happens every quarter or monthly.

2. How will the interest rate change?
Interest rate offered to you is based on a base rate. The bank will have a base rate which is the lender's pre-selected internal rate. The base rate changes due to changes in the interest rates in the economy.

If interest rates in the economy rise, the base rate will rise. If interest rates in the economy fall, the base rate will drop. Different banks adopt different nomenclature to coin a word for this base rate.

3. By how much will the interest rate change?
You need to understand the technical aspect of this. There is a spread or margin on this base rate. The spread/ margin is the percentage added or subtracted from the base rate. This is meant to cover the lender's administrative and other costs.

To the base rate, the bank will attach what is called a Spread.
Eg: Bank’s RPLR = 10.00%.

The interest rate offered to you for education loan is = RPLR - 1% = 9.00% it can also be It could also be = RPLR + 0.5%. = 10.50%

Depending on various factors, the bank will decide on the interest rate and if it is higher (premium) or lower (discount) than the base rate.

4. How will it affect me?
When you take an education loan with a floating rate, you have two options.

Option 1: The rate of interest increases or decreases, but you keep the tenure constant. In that case, the number of years you take to repay the loan stays constant but the EMI increases or decreases.

Option 2: When the rate of interest increases, you can extend the tenure. In that case, the number of years you take to repay the loan increases but the EMI stays constant. Similarly, when the rate of interest decreases, you can reduce the tenure of your loan.

This is a very important factor which can lead your educational loan repayment plans haywire if interest rates shoot up.

Parents normally opt for education loans when they are in the 40-50 age bracket. Due to this higher age bracket, the loans are provided against a higher collateral like house, deposits or stocks.

Education loans have an initial moratorium till the child secures a job. Some offer the facility to start repayment after a certain pre-specified period from the completion of the course.

[Pratik (-=hidden=-)]

Indeed the above points are a must to consider looking at the fact that around half of the students are taking loans for doing mba.
Another important thing is that in addition to the principal, there's a very hefty amount of interest(which keeps on piling every year) to pay back.

[vikas.d.goel (-=hidden=-)]

Hi aditya,

Good to see your post!!it was very informative but what i think is ,that the process of sanctioning lonas is so complicated that the students get frustrated and they look for different options available!!

It happened with me as well .My only concern is that why do the banks create such difficult regulations for the study loans!!students like me suffer because of this.

Vikas goel
IBS-CHD class of 2009

[sweta (sweta)]

hello group members
i got selected 4gurgaon campus .....but i am facing problem while getting bankloans.......most of the banks are raising issues one after another while providing bank loans.........i am at stake...........i need a loan of only 4lacs ........but not a single bank is going to provide this amt without a collateral security which is not at all written in brochure........if they dont have the intension of giving educational loan then y do they set up stalls in the campus in the name of providing loans to the ibs students?its absolutely misleading........bcos they r writing onething....telling sumthing else and ultimately doing nothing...can any1 suggest me a bank from which we can get loan easily...........please