J&K Bank has announced lowest ever interest rates for home loan and car loan schemes. Is there any concession or subsidy in the rate of interest in education loan scheme of the bank? What is the current rate of interest applicable in education loans?
                                                                           (Mudasir Ali, Srinagar)

 There is no interest subsidy on education loans. However, J&K Bank Education Loan scheme offers concession in rate of interest subject to certain conditions. Currently, the rate of interest is linked to the amount of loan. Besides, it carries floating as well as fixed rate of interest, which depends upon the repayment period of the loan chosen by the borrower. If the borrower chooses repayment period of above 5 years, then floating rate of interest is applicable. As on date, in such cases, loans upto Rs.025 lacs would 9 per cent; for loan above 0.25 lac to Rs.5.00 lacs, the rate would be 10 per cent; for loans above Rs.5.00 lacs to Rs.10.00 lacs, 11 per cent; and for above Rs.10.00 lacs to Rs.20.00 lacs, it is 12.50 per cent. If the borrower chooses repayment period of less than five years, then rate of interest for loans up to Rs.0.25 lacs Loans will be 9.50 per cent; above Rs.0.25 lacs to Rs.5.00 lacs, it will be 10.50 per cent; above Rs.5.00 lacs to Rs.10.00 lacs, it will be 11.50 per cent; and 12.50 per cent for loans above Rs.10.00 lacs to Rs.20.00 lacs. 
 As regards concessions in interest rates on education loans, the bank offers one per cent concession to the loanees if the interest is serviced during the study period when repayment holiday is specified for interest/ repayment under the scheme. Notably, the bank charges simple interest during the repayment holiday/ moratorium period. In addition to this, students pursuing courses from IITs / IIMs and ISB are also extended 0.50 per cent concession in rate of interest.

I belong to a lower middle class family. Despite financial constraints my parents ensured that I continue my education. My father is a low paid employee and I want to raise a loan to continue my studies. Can I get education loan for completing my graduation from J&K Bank? If yes, what are the expenses covered in the loan component?
                                                                            (Suhail Wani, Pulwama)
 
First of all let me tell you that the courses eligible under J&K Bank Education Loan scheme also include graduation courses like B.A., B.Com., B.Sc., etc. You along with your father should approach your nearest JK Bank branch, and explain your needs. On being satisfied about the genuineness of the needs and the purpose, the branch will process your loan case. In normal course, while appraising the loan the bank  looks into the future income prospects of the student. Wherever required, the means of parent or guardian are also taken into account to evaluate re-payment capability.
The expenses covered under the scheme include:
* Fee payable to college/ school/ hostel. 
* Examination/ Library/ Laboratory fee. 
* Purchase of books/ equipments/ instruments/ uniforms. 
* Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts, subject to the condition that the amount does not exceed 10% of the total tuition fees for the entire course. 
* Travel expenses/ passage money for studies abroad. 
* Purchase of computers - essential for completion of the course. 
* Insurance premium for student borrower
 Any other expense required to complete the course - like study tours, project work, thesis, etc. are also taken into account while calculating the loan amount.
(The views are of the author & not the institution he works for)
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Lastupdate on : Sun, 7 Mar 2010 21:30:00 Makkah time
Lastupdate on : Sun, 7 Mar 2010 18:30:00 GMT
Lastupdate on : Mon, 8 Mar 2010 00:00:00 IST