SBI collateral-free study loan: 10 things to know – eligibility, maximum amount, tax benefits and more

The State Bank of India, India's largest bank, has started offering collateral-free education loans of up to 50 lakhs for students planning to study abroad.

Through the SBI Global Ed-Vantage, the bank offers an overseas education loan for students wishing to pursue regular full-time courses at foreign institutions.

10 things to know about SBI's collateral-free study loan

1. Collateral free: Loans up to ₹50 lakhs without security at selected institutions.

2. Repayment period: The loan has to be repaid through EMIs for up to 15 years.

3. Total loan amount: Under the initiative, students can take loans up to ₹3 crore.

4. Disbursement period: The loan will be sanctioned before getting Form I-20 or a visa.

5. Tax benefits: Students will get benefits under section 80(E) of the Income Tax Act, which provides a deduction on the interest paid on the education loan availed for higher studies.

6. Eligible courses: Regular Graduate Degree, Post-Graduate Degree, Diploma, Certificate, Doctorate Courses in any discipline

7. Eligible countries: Institutes and Universities in the USA, UK, Canada, Australia, Singapore, Japan, Hong Kong, New Zealand, and European countries such as Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, and the United Kingdom.

8. Expenses covered: Some of the major costs covered include:

• Tuition and hostel fees
• Examination, library and laboratory fees
• Travel expenses or passage money for studies abroad.
• Cost of books, equipment, instruments, uniforms and computer at a reasonable cost is required to complete the course.
• Expenses on study tours, project work, thesis, etc., may be covered with a 20 per cent cap on the total tuition fees payable for course completion.
• Caution deposit, building fund deposit, or refundable deposit supported by Institution bills. This amount should not exceed 10 per cent of the total tuition fees.

9. Processing fee and interest rate: A processing fee of ₹10,000 will be charged per application. Simple interest will be charged during the course and moratorium period. For loans without collateral from ₹7.5 lakh to ₹50 lakh, an interest of 10.15 per cent will be charged, according to SBI's website.

10. Margin amount: Scholarship will be included in the margin, which is a percentage of the total loan that the borrower has to pay for out of their own funds.