student loans in india

Most parents in kerala want their children to take up engineering or medical studies once they are past their 12th or atleast go for some nursing course.

In the era of self financing institutions the fee for such courses could be very high.

Most middle class parents would not have the financial resources for this. Then they think of taking out educational loans for their kids. In the old days education loans were not very student friendly. But now some things seem to have changed.

For studies in india, a bank would usually give upto around 4 lakhs to 7 lakhs.
Some banks finance only upto 75% to 90% of the total amount needed for the course especially for studies abroad in foreign countries and the student may have to make up the remaining portion from his own pocket. Sometimes the loan is given jointly in the name of the student and the parent. Some consultancy services have also sprung up claiming to provide personalised advice and guidance.

Most banks require
admission letter detailing the fee etc from the institute where the student is going to study and the usual documents which are required for taking a loan.

In the case of students going to private nursing colleges in the neighbouring states like Tamil Nadu or Karnataka, some banks are not eager to give the loan facility due to non-uniformity in the fee structure and some other problems.

Usually the repayment of the loan would begin around 1 year from completion of the course according to proper schedule or 6 months after getting a job whichever is earlier.The EMI on a 4 lakh loan would be somewhere around Rs.8000/- to 10,000/- per month , but would change according to the interest rates contracted upon.

The end result would be that, if the student is weak in his studies or falls into bad company, he would not be able to complete the course and he would be left with arrear papers, and his parents would have to repay the loan or the student may have to take up the first job that comes up and most of his salary would be spent in repaying the loan, because the interest rate on student loans is quite interesting!! to say the least.

There have also been instances when some student allegedly committed suicide because of not being able to raise a loan to continue with their professional courses.

SBI , state bank of india

state bank of india or SBI was where my parents had an account. In the old days there were not many private/foreign banks . So I also got my first bank account at SBI. In those days, there were no computers and records were kept in writing in ledgers, The pass book was smaller and had a plastic jacket and fit nicely into your shirt pocket. There was no ATM . If you wanted to withdraw money, you had to go to the bank during the working hours.
In those days the interest rates were nicer. For example, the PF (provident fund ) interest rate was more than 11%.
Then they introduced computers. The pass book became bigger and would not fit in the shirt pocket. Initially the
computer network seemed to be restricted inside the particular branch and the software ran on something that looked like dos and was pretty fast.

Then after sometime they introduced something like core banking, which was networking across the whole country. In the beginning , this led to a slowdown in the service because of problems in the network.
There were some problems in some other parts of India due to flood in Bombay some years back.

Even now updating the passbook is sometimes a problem during busy periods. Sometimes the printing is way off the mark and prints over previous records rendering them illegible, and the teller has to reprint the whole thing on a new page.

But on the plus side you have atm withdrawls. sbi has many atms in most cities. In kerala , there are other state banks like SBT which also have atms. You also have online access to your account through onlinesbi.com.
If you give a form for online access , they will give you a kit with initial login name and password. But it takes about one day for the access to be activated. For online transaction of money using neft , you also need to register your cell phone ( for getting the transaction password ), You get an online form/receipt when you do it, whose copy (written / printout) has to be taken to your branch before the registration is complete.



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