A

FINAL PROJECT REPORT

ON
COMPARATIVE STUDY OF EDUCATION LOAN WITH
REFERENCE TO SBI, PNB AND HSBC

SUBMITTED BY:
POONAM BALA
SEMESTER: MBA IVth
ENROLLMENT NUMBER: 80901317035

MALOUT INSTITUTE OF MANAGEMENT &

INFORMATION TECHNOLOGY
MALOUT, MUKTSAR 152107
PUNJABBATCH (2008-2010)

Declaration by the Candidate

I POONAM BALA, student of MBA IV of Malout Institute of

Management & Information Technology, Malout (2008-10) bearing
enrollment number 80301317035 hereby declare that the research
project report titled COMPARATIVE STUDY OF EDUCATION
LOAN WITH REFERENCE TO STATE BANK OF INDIA
(SBI), PUNJAB NATIONAL BANK (PNB) AND HSBC.
Is the outcome of my own work and same has not been submitted to
any university/ institutions for the award of any degree or any
professional diploma.

Date:

(
Sign of candidate

ACKNOWLEDGEMENT
Appreciation can make a day, even change a life. Your
willingness to put it into words is all that is necessary.

It has been a great learning experience on this project entitled

Comparative Study of Education Loan With Reference TO SBI,
PNB, And HSBC.
I would take this opportunity to express my sincere accolade to
my faculty guide, Mrs. Rajinder Kaur Maam, for facilitating me at
various phases of the project. Despite his demanding schedule, he
bestowed every possible support to me, so as to carry on the project
work without any hindrance.
Last but not the least; I thank my parents and teachers for bringing
me up in a successful environment and teaching me all the basic
etiquettes and ethics required for my growth in an organization

Table of Content

1.

Introduction of Education Loan

2.

Research Methodology

3.

PNB Education Loan Scheme

4.

SBI Education Loan Scheme

5.

HSBC Education Loan Scheme

6.

Findings

7.

Conclusion

8.

Recommendations

9.

Appendix

10.

Bibliography

INTRODUCTION
Education is central to the Human Resources Development and
empowerment in any country. National and State level policies are framed
to ensure that this basic need of the population is met through appropriate
public and private sector initiatives. While government endeavors to
provide primary education to all on a universal basis, higher education is
progressively moving into the domain of private sector. With a gradual
reduction in government subsidies higher education is getting more and
more costly and hence the need for institutional funding in this area.
The scope of education has widened both in India and abroad covering
new courses in diversified areas. Loans for education should be seen as an
investment for economic development and prosperity.
Based on recommendations made by a Study Group, IBA had prepared a
Model Educational Loan Scheme in the year 2001 which was advised to
banks for implementation by Reserve Bank of India vides circular
No.RPCD.PLNFS.BC.NO.83/06.12.05/2000-01 dated April 28, 2001
along with certain modifications suggested by the Government of India. In
line with the announcement made by the Hon'ble Finance Minister in his
Budget Speech for the year 2004-05, IBA had communicated certain
changes in the security norms applicable to educational loans with limits
above

Rs.4

lakhs

and

up

to

Rs.

7.5

lakhs.

Education loans can augment the boundaries of what you can achieve
Education never ends it is not said without reason. We are educated all
our lives and getting an education not only is a great achievement but
something that gives you the tools to find your own way in the world.
Education is indispensable; little do we realize how much more it can bring
to us in terms of worldly amplifications. Anyone can have propensity and
the natural endowment for education. But one might not have the resources
to finance their education. Loans for education you have never thought
about it as a feasible arrangement. Education loans can open newer
panoramas in regard to your education aspirations.
An extensive range of student and parent loans are presented under the
category of education loans. There are many types of education loans.
Discerning about the types of education loans will help you in making the
accurate decision. The single largest resource of education loans is federal
loan. The two main federal education loan programs are the Federal Family
Education Loan Program and the Federal Direct Loan Program. In the
Federal Family Education Loan Program the bank, credit union or the
school is the lender. While the federal direct loans program, the department
of education is the lender.
Private education loans are offered to people so that they can provide
financial backup to their education plans. Private education loans are not
endorsed by other government agencies but are provided by other financial
institutions. Private education loans program are optimum for both
undergraduate and graduate studies.
Education loans can provide funding for tuition fees, board and room,
books computer, and even student travel. An education loan can help you

with all these expenses. Education loans are sufficient enough to take care
of all these expenses. If you have been forced to drop your education for
any reason, you can still take up your education at any point of time.
Irrespective of your age and also where you have left your education.
There are no specific eligibility criteria for education loans. Any person
who is in need of sponsorship for education can find an education loan that
befits his or her financial necessity. Loan amount on education loans vary
with the kind of education you want to pursue. The repayment options with
education loans will similarly accommodate your personal financial
preferences. You can either repay interest amount while still in school or six
months after graduation. Education loans offer up to ten years for
repayments. The refund alternatives on education loans also include
deferment, forbearance and consolidation. Education loans will help you in
planning your life after graduation. However, an education loan like every
loan is a huge financial obligation. Education is an experience of life. It is
so rewarding in itself that it helps you to manage almost everything in your
life. Education loans discipline your impulse towards education and
training into a fruitful contrivance. The payoff is delicious in terms of
improved quality of life. Education is expensive! Is it? With education
loans it cant be. Now, you dont have to take the road in front of you.
Make your own road with education loans.

OBJECTIVES

1. To know the banks criteria of providing education loan to the

students for higher studies in India or Abroad.
2. To know which banks are providing supporting educational loan
scheme to students?
3. To know the hindrances in the way of education loan

RESEARCH METHODOLOGY

PROJECT TITLE:

Comparative Study of Education Loan with

Reference to PNB, SBI and HSBC.

To compare education loan schemes & policies of the Punjab National
Bank (PNB), State Bank of India (SBI) and Hong-Kong Shanghai Banking
Corporation (HSBC)

METHODOLOGY:
In this research I have adopt the Exploratory Research method only for
PNB, SBI and HSBC Education loan schemes for just compare the offer
document of these three banks.
DATA SOURCE:
Primary data is taken from various internal documents and circulars issued
by the banks from time to time and Secondary data is taken from different
books and financial information published in newspapers and from the
banks websites and other related websites.

SCOPE:

Research scope is only three banks and these three banks are State Bank of
India (SBI), Punjab National Bank (PNB), and Hong-Kong Shanghai
Banking Corporation (HSBC).
SAMPLE SIZE
SAMPLE UNIT:- Malout city

LIMITATIONS:
There are some limitations in this research; these limitations are as follows

 Time limitation
Many banks provide education loan but in this research only three
banks are taken for consideration.
Expenditure on research
Some banks are not provided their internal information/circular.

PNB EDUCATION LOAN SCHEMES

Punjab National Bank is now offering concession in interest in education
Loan Scheme. The concession in interest rates is available to new
borrowers who will avail education loan from the bank w.e.f. 01.04.2007.
The bank has taken this step to make education loan scheme more customer
friendly thus facilitating aspirant students to avail education loan on
comfortable & affordable terms. .

Further, Interest is charged monthly on simple basis during the repayment

holiday/moratorium period & concession of 1% in rate of interest is also
allowed provided the same is serviced regularly during study period.
Punjab National Bank has tied up with Kotak Mahindra Insurance to
provide life insurance cover for education loan borrowers.
The insurance would cover study period as well as repayment period, he
said, adding in case of any mishap, the insurance company would take care
of the loan repayment rather than the aggrieved parents.

VIDYA LAKSHYAPURTI EDUCATION LOAN SCHEME

1.

OBJECTIVE
1. To provide financial support to deserving / meritorious students
for pursuing education in India and abroad.
2. To providing financial assistance to meritorious students with an
opportunity including undertaking basic education and to the
meritorious students to pursue higher, professional and technical
education.

3. No deserving student is denied an opportunity to pursue higher

education for want of financial support.

2.

ELIGIBILITY

2(i)

Courses eligible

a) Studies in India
School Education including Plus 2 stage
Graduation courses B.A., B.Com., B.Sc.,etc.
Post Graduation courses : Masters & Ph.D.
Professional courses : Engineering, Medical , Agriculture,
Veterinary, Law, Dental, Management, Computer etc.
Computer Certificate courses of reputed institutes accredited to
Department of Electronics or institutes affiliated to University
Courses like ICWA, CA, CFA etc.
Courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc.
Courses offered in India by reputed foreign University.
Evening Courses of approved Institutes.
Other Courses leading to Diploma / Degree etc. conducted by
Colleges / Universities approved by UGC / Govt. / AICTE /
AIBMS / ICMR etc.

 Courses offered by National Institutes and other reputed Private

Institutes.
b) Studies abroad
Graduation For job oriented professional / technical courses
offered by reputed universities. Credentials of the Educational
Institution may be got certified from authenticated sources /
Embassy in India.
Post Graduation MCA, MBA, MS etc.
Courses conducted by CIMA London, CPA in USA etc.

2(ii) Student eligibility

Should be an Indian National
Secured admission to Professional / Technical courses through
Entrance Test / Selection process.
Secured admission to foreign University / Institutions.
Student should have secured pass marks in the qualifying
Examination for admission to Graduation Courses.

2(iii) Expenses considered for Loan

Fee payable to Collage / School / Hostel.
Examination / Library / Laboratory fee.
Purchase of books / equipments / instruments / uniforms.
Caution Deposit / Building Fund / Refundable Deposit
supported by Institution Bills / Receipts.
Travel Expenses / Passage money for studies abroad.
Purchase of computers essential for completion of the Course.
Any other expense required to complete the course like study
tours, project work, thesis, etc.

3.

QUANTUM OF FINANCE

Need based finance, subject to repaying capacity of the parents / students

with margin and the following ceilings :-

4.

Studies in India

Maximum Rs. 7.50 lacs.

Studies abroad

Maximum Rs. 15.00 lacs.

MARGIN

Upto Rs. 4.00 lacs

Above Rs. 4.00 lacs

Nil
:

Studies in India 5%

Studies in Abroad

15%

Scholarship / assistantship to be included in Margin.

Margin may be brought in on year-to-year basis as and
when disbursements are made on a pro-rata basis.

5.

SECURITY
No Security may be insisted upon for loans upto Rs. 4.00 lacs.
However, for loans above Rs. 4.00 lacs, Collateral Security of
Suitable value (atleast equal to loan amount) or co-obligation of
parents / guardian / third party alongwith assignment of future
income of the student for payment of instalment may be obtained
viz., :Upto Rs. 4.00 lacs

No Security.

Above Rs. 4.00 lacs

Collateral Security of Suitable value

(equivalent to 100% of the amount of

loan)
or co-obligation of parents / guardian /
third
party.
In addition to above assignment of future income of the student for
payment of instalments (stands included in the Agreement).

NOTE :
The document should be executed by both the student and the parent /
guardian.
The security can be in the form of land / building / Govt. Securities /
Public Sector Bonds / Units of UTI, NSC, KVP, LIC Policy, Gold,
Shares / Debentures, Bank Deposit in the name of the student parent /
guardian or any other third party with suitable Margin.
Wherever the land / building is already mortgaged, the unencumbered
portion can be taken as security an II charge basis provided it covers
the required Loan amount.

 In case the loan is given for purchase of Computer, the same to be

Hypothecated to the Bank.
6.

RATE OF INTEREST

Upto Rs.4.00 lacs

PTLR

Above Rs.4.00 lacs

PTLR + 1%

The interest to be debited monthly on simple basis during the

Repayment holiday / Moratorium period.
Penal interest @ 2% be charged for above Rs. 2.00 lacs for the
overdue amount and overdue period.
7.

LOANING POWERS
As per loaning Power Chart in force from time to time .
No application for educational loan received should be rejected
without the concurrence of the next higher authority.

8.

REPAYMENT

Repayment
Moratorium

Holiday

/ Course period + 1 year OR 6

months

after

getting

whichever is earlier.
-

job,

The loan is to be repaid in 5-7 years after commencement of repayment. If

the student is not able to complete the course within the scheduled time,
extension of time for completion of course may be permitted for a
maximum period of 2 years. If the student is not able to complete the
course for reasons beyond his control, sanctioning authority may at his
discretion consider such extensions as may be deemed necessary to
complete the course.
The accrued interest during the repayment holiday period to be
added to the principal and repayment in Equated Monthly
Instalments (EMI) be fixed.
1% Interest concession may be provided by Incumbents to lonees
if the interest is serviced by them during the study period when
repayment holiday is specified for interest / repayment under the
Scheme.
Interest concession is to be provided to borrowers only at the time
of final repayment of the loan.
9.

POST SANCTION FOLLOW UP

Branches to contact college / university authorities to send the
progress report at regular intervals in respect of students who have
availed loans.

10. UPFRONT FEE

NIL
11.TIME NORMS
Loan applications have to be disposed of within a period of 15 days to one
month but not exceeding the time norm stipulated for disposing of loan
applications under Priority Sector Lending.

10.

CAPABILITY CERTIFICATE
Since, some of the foreign universities require the students to
submit a certificate from their bankers about the sponsors solvency
/ financial capability, with a view to ensure that the sponsors of the
students going abroad for higher studies are capable of meeting the
expenses till completion of studies, capability certificate may be
issued in such cases. For this financial and other supporting
documents may be obtained from the applicant.

11.

LOAN APPLICATION
Form No. PNB 813.

12.

MODE OF APPLICATION OF INTEREST

Interest on Education Loan accounts shall be worked out at the end

of each month and recorded on a separate sheet in the ledger but
not debited to the borrowers account. Instead, it should be debited
to a separate account opened in the Subsidiary General ledger titled
Interest Accrued on Advances under Education Loan Scheme
forming one of the components of the main head of General
Ledger. Interest Accrued on Advances and credited to Revenue
Head Income Interest on term loan till the commencement of
repayment of first instalment. On the date fixed for commencement
of repayment, the whole amount of interest so far worked out and
recorded as above should be debited to the borrowers account by
corresponding credit to the Interest Accrued on Advances under
Education Loan Scheme. Repayment of loan and interest may be
determined keeping in view the above procedure for charging of
interest.
13.

CONFIDENTIAL REPORTS
On Borrower(s)

: No confidential report on the borrower will be

required as the application for loan will indicate the information

required to be furnished in the confidential report.
On Guarantor(s) / Co-obligants
14.
i)

: Form No. PNB 905 /282(C).

DOCUMENTATION
Agreement (Annexure -1) duly stamped, to be taken in case
where the student is minor. Further, in case of Minor student, on

attaining his/her majority confirmation from student be obtained

as per Annexure III.
ii)

Agreement (Annexure II) duly stamped , to be taken in case

where the student is Major.

iii)

Letter of Guarantee (PNB 785) duly stamped as an Agreement

to be taken in case of loan amount is above Rs. 4 lacs.

iv)

In case of collateral security is to be taken is mortgage,

procedure given in Book of Instruction on Loans to be followed.

The documents should be executed by the student and parent /

guardian.
15.

DISBURSEMENT

Education loan is to be disbursed in the form of term loan. A limit upto

which advance is to be allowed during each year will be set up. Each
time the borrowing scholar is in need of funds to pursue his studies; he
will approach the lending office and will explain his needs to the
Incumbents Incharge will permit drawing on the borrowers account
within the limit fixed. This will also enable the Incumbent In charge to
remain in close touch with the borrowing studentss activities.
The loan to be disbursed in stages as per the requirement / demand
directly to the Institutions / Vendors of Books / equipments /
instruments to the extent possible.

 LOAN TO BE SANCTIONED BY THE BRANCH NEAREST

TO THE PLACE OF DOMICILE OF THE STUDENT.
In case of , purchase of stationary and books, loan may be disbursed in cash
on declaration by the applicant and production of bills.
16.

CLASSIFICATION

Advances allowed under the Scheme will be classified under Priority

Sector.

17.

CHECK LIST

To facilitate expeditious disposal of applications, a check-list regarding

documents, security etc. alongwith application forms for Education
Loans be provided to intending borrowers. An illustrative check-list
enabling a ready reference, so that intending borrowers can furnish all
related documents / papers in one lot, is given below : Loan application on Banks format.
Passport size photograph.
Proof of Address.
Proof of having secured pass marks in last qualifying examination.

 Letter of admission in professional, technical or vocational

courses.
Prospectus of the course wherein charges like Admission Fee,
Examination Fee, Hostel Charges etc. are mentioned.
Details of Assets & Liabilities of parents.
In case loan amount is above Rs. 4.00 lacs :
Particulars of Guarantors and details of their Assets &
Liabilities.
If immovable property offered as Collateral Security copy of
Title Deed, Valuation Certificate and Non-encumberance
Certificate from approved Lawyer of the Bank.
Photocopy of Passport & Visa, in case of study abroad.
Any other document / information, depending upon the case and
purpose of the loan.
18.

POST SANCTION SUPERVISION

The Bank will reserve the right of giving loan under this Scheme to any
scholar or continue / discontinue the yearly disbursement to a borrower
under the Scheme, depending upon whether or not he / she shows good
results at the institution he /she has joined for studies and whether of not
reports about his / her conduct are satisfactory.
Such reports will be required to be produced to the Incumbents Incharge
of the lending office before the start of each academic year subsequent to
the first year.

Loan pass book (PNB589) be issued to the borrower containing details

such as date of sanction of loan, amount of loan, amount of loan
sanctioned, subsidy received (if any) rate of interest, amount due under
each instalment, due date of instalment etc.

19.

OTHER CONDITIONS
Zonal Managers and above may consider relaxation with regard to

Eligibility, Margin and Security norms on merits of each case.

No Due Certificate need not be insisted upon as a pre-condition for
considering educational loan. However, Branches may obtain a
declaration / an affidavit confirming that no loans are availed from
banks.

STATE BANK OF INDIA (SBI) EDUCATION LOAN

SBI EDUCATION LOAN
A term loan granted to Indian Nationals for pursuing higher education in
India or abroad where admission has been secured.
1.

ELIGIBLE COURSES

All courses having employment prospects are eligible.

Graduation courses/ Post graduation courses/ Professional courses

Other courses approved by UGC/Government/AICTE etc.

2.

EXPENSES CONSIDERED FOR LOAN

Fees payable to college/school/hostel

Examination/Library/Laboratory fees

Purchase of Books/Equipment/Instruments/Uniforms

Caution Deposit/Building Fund/Refundable Deposit

Travel Expenses/Passage money for studies abroad

Purchase of computers considered necessary for completion of course

Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours,
project

3.

work

etc.

AMOUNT OF LOAN

For studies in India, maximum Rs. 10 lacs

Studies abroad, maximum Rs. 20 lacs

4.

INTEREST RATE

For loans upto Rs. 4 lakh 10.50% p.a.

For loans above Rs. 4 lakh 11.50% p.a.
5.

PROCESSING FEES

No processing fee/ upfront charges

Deposit of Rs. 5000/- for education loan for studies abroad which will
be adjusted in the margin money

6.

REPAYMENT TENURE

Repayment will commence one year after completion of course or 6

months after securing a job, whichever is earlier.

Place of Study

In India
Abroad

Repayment

Loan Amount

Period

in Years

Up to Rs. 7.5 lacs

5-7

Above Rs. 7.5 lacs

5-10

Up to Rs. 15 lacs

5-7

Above Rs. 15 lacs

5-10

Security
Amount
Studies In India
Studies Abroad
Upto Rs. 4 lacs
No Security
No Security
Above Rs. 4 lacs to Rs. Third
Party
Third Party Guarantee
7.50 lacs
Guarantee
Above Rs. 7.50 lacs to Tangible Collateral Tangible Collateral security
Rs. 10 lacs(India)/ Rs. 15 security

for

lacs(Abroad)

value of loan

Rs 15 lacs to Rs. 20 lacs

___

7.

MARGIN

For loans up to Rs.4.0 lacs : No Margin

full of suitable value of loan or

third party guarantee
Tangible Collateral security
for full value of loan

8.

For loans above Rs.4.0 lacs:

o

Studies in India: 5%

Studies Abroad: 15%

DOCUMENTATION REQUIRED

Completed Education Loan Application Form.

Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc

Schedule of expenses for the specified course

2 passport size photographs

Borrower's Bank account statement for the last six months

Income tax assessment order, of last 2 years

Brief statement of assets and liabilities, of the Co-borrower

Proof of Income (i.e. Salary slips/ Form 16 etc)

* Conditions Apply

EDUCATION LOAN SCHEME FOR STUDENTS OF ISB

Loan amount

Upto 95% of all costs upto a maximum of

Rs.14.50

lac.

(Taking

into

account

expenditure of married students and cost

of a laptop, which is essential for
students.)
Margin
Rate of Interest

5%

9%

(Floating). EMI*: Rs.1287/-

per lac.

8.5% (Floating), if tangible security

equivalent to 50% of loan amount is
furnished. EMI*: Rs.1260/- per lac.

Should a tangible collateral security

equivalent to 50% of outstanding
loan amount be furnished midway
through the tenure of the loan, the
concession of 50 basis points in the
rate

of

interest

shall

become

applicable from the month following

the month in which such security is
furnished.

Only

Simple Interest

will be

charged during the course and

moratorium period.

The rate of interest will not change

during the complete tenure of the

loan.

Interest

is

calculated

on

daily

reducing balance.EMI of 9 years &

9 months
Repayment

Up to 10 years. A customised repayment

schedule taking into account individual
repayment capacity of the student is
permissible.

Moratorium Period

Up to 3 months after completion of

course.

Co-borrower

Yes. The loan will be granted jointly with

the parent/ guardian.

Security

Lien on the original Certificate and

Marks Sheet of the student. The
Certificate will remain in custody of
SBI during the currency of the loan.

Third

party

guarantee

(TPG),

preferably of earning sibling of the

student or a person known to the
Bank i.e., a person who is our
customer or he/she is a reputed
person or a guarantor of one of our

borrowers.
Application

Processing Loans will be sanctioned and disbursed

Time

within three days, after submission of

application form, complete in all respects
except where mortgage of immovable
property is to be created.

Processing

Fees/ Nil.

Prepayment

Charges

Foreclosure Charges
Takeover of Education Permissible
Loan from other Banks/
Financial Institutions for
existing

students

and

alumni
Contact Branch

Hyderabad University Campus Branch,

Gachibowli,

Hyderabad-

Telephone:

500019

040-23011301/289

Fax: 040-23011617

Documents to be enclosed
i.
Mark sheet of last qualifying examination for school and
ii.
iii.

graduate studies in India.

Copies of letter conferring scholarship, freeship, studentship etc.
Documents evidencing the duration of course and
commencement thereof viz. prospectus or certificate from the

iv.
v.
vi.

competent authority of the institution.

Proof of admission to the course.
Schedule of expenses for the course.
Two copies of passport size photograph of the borrower(s) /

guarantor(s).
vii. Statement of Bank account for the last six months of the
borrower(s)
viii. Signature identification
ix.

from

bankers

of

borrower(s)

guarantor(s).
A copy of Passport/Voters ID Card/Proof of residence.

For salaried persons

i.
Latest salary slip showing all deductions.
ii. Employment details for the last 5 years.
iii. Latest TDS Certificate Form 16.
iv. Statement of assets and outstanding liabilities.
For Self-Employed/Professionals and Businessmen

If Collateral Security is Mortgage of Landed Property

Bank Name

Type Rate

Processing

Pre-Paid

Fees

Charges

INDIA :- upto
4 lakhs 11%, >
4
Fixed

lakhs

11.75%

ABROAD

:-

upto 4 lakhs

INDIA :- 0 ;
ABROAD :- NA
0

11%, > 4 lakhs

11.75%
INDIA :- upto
4 lakhs 11.5%,
4-7.5

lakhs

11.25%; > 7.5

lakhs 11% ; INDIA :- 0 ;
Fixed ABROAD

:- ABROAD :- NA

upto 4 lakhs 0
11.5%,

4-7.5

lakhs 11.25%;
>

7.5

lakhs

11%

HSBC
EDUCATION LOAN SCHEAMES

Educational Loan
Education is the greatest asset anyone can have. Recognizing this, HSBC,
in affiliation with Global Student Loan Corporation (GSLC) has designed
a student education loan program to provide funding for students who are
seeking to attain a world-class education at a U.S college or university.
HSBC India Student Education Loan Program can help ease students'
financial concerns as they embark on one of the biggest decisions in their
life attending the college / university of their dreams. The program
enables you to borrow funds to cover the cost of education tuition, fees,
room charges, boarding, books, and other education-related expenses.
Global Student Loan Corporation - GSLC - is one of the leading
organizations which enables non - U.S. students to find the path to a worldclass education. With GSLC, you can access a student-specific Loan
Certificate demonstrating adequate funding to attend school - a requirement
for securing a U.S student visa. You can receive advice from GSLC's
International Student Planner and remain at ease knowing that GSLC has
extensive relationships with many U.S colleges and universities. You will
also be able to use GSLC's Budget Calculator to calculate how much will
be needed towards funding your studies and receive guidance about
budgeting for school.

FEATURES AND BENEFITS

Get financial flexibility with HSBC educational loans

 LOAN AVAILABILITY
Educational loans are available for studies in India or abroad. Avail of
loan amounts ranging from a minimum of Rs. 50,000 to a maximum
of Rs. 25,00,000*.
SMOOTH REPAYMENT
Our Equated Monthly Installments (EMIs) scheme allows for easy
repayment and saves you from hassles.
Flexibility
Our loans are tailor-made to your needs. Opt for tenures up to 4 years
for unsecured loans and 7 years for secured loans (against security of
a residential property / shares).
COMPREHENSIVE COVERAGE
Educational loan also covers expenses for boarding and lodging.
HSBC banking benefits
Take advantage of HSBC's banking benefits; let us help you open a
Savings account or avail of a debit card.

LOW INTEREST RATES

Bank offer you competitive interest rates on your educational loans.
Bank also give you the option of choosing between a fixed or floating

rate of interest (the floating rate option is available only in case of

secured loans).
Special Relationship Discounts
You are also eligible for special discounts exclusively designed for
HSBC customers (of 6 months or more).
* Loans above Rs.500,000 are available against security of residential
property/shares. Loans to value ratio to be less than or equal to 50%
of the property valuation.
Loans available for study at select institutes, based on their
accreditation.
The interest rate on your floating rate Home loan is linked to HSBC's
Mortgage Lending Rate (MLR) and any revision in the MLR would
impact your interest rate. The MLR is currently 9.5%.
Terms and conditions apply. All loans at the sole discretion of The
Hongkong and Shanghai Banking Corporation Limited, India. Loans
available for applicants and properties in and around the limits of
cities where HSBC has branches and is subject to change from time to
time.
Please be advised that vide Finance (No.2) Act 2004, w.e.f. 10 Sep
2004, a service tax of 10% + 2% education cess thereon will be
applicable on our fees and charges.
ELIGIBILITY
To qualify for an Educational Loan, the following criteria apply.

Applicant should be a resident Indian

Minimum net annual income of Rs 150,000 for secured loan and

Rs 75,000 for unsecured loan

3

Student must have secured admission to a recognised

college/university in India or abroad*

* Loans available for study at select institutes, based on their
accreditation
The interest rate on your floating rate Home loan is linked to HSBC's
Mortgage Lending Rate (MLR) and any revision in the MLR would
impact your interest rate. The MLR is currently 9.5%.
Terms and conditions apply. All loans at the sole discretion of The
Hongkong and Shanghai Banking Corporation Limited, India. Loans
available for applicants and properties in and around the limits of
cities where HSBC has branches.
Vide Finance (No.2) Act 2004, w.e.f. 10 Sep 2004, a service tax of
10% + 2% education cess thereon will be applicable on our fees and
charges.

FINDINGS
Sl.

Parameter

Private Banks

Public Banks

Beneficiaries

Economically

Economically

No.
1.

affluents

weaker

sections of society.

Sections also.

Objective

Commercial

National and

3.

Aimed at

Profit earning

Not profit alone

4.

Margin money

Must

Flexible

5.

Security

Necessary

Less important

6.

Interest rate

7.

Attitude

2.
social

High
Rigid and strict

Reasonable
Flexible and liberal

COMPARATIVE STUDY OF EDUCATION LOAN WITH

REFERENCE TO SBI, PNB & HSBC
Sl.

Basis

No.
1

Difference
Max. loan for Rs. 7.50 Lacs
studies

of PNB

in

SBI

HSBC

Rs. 10.00 Lacs

Min.

Rs.

50,000 to a

India

Max. of Rs.

Max. loan for Rs. 15.00 Lacs

25,00,000
Not

studies
3

Rs. 20.00 Lacs

in

Available

Abroad
Interest Rates Upto Rs.4.00 lacs Upto Rs. 4 lakh 9.5% p.a +
PTLR

10.50%

p.a. 10% service

Above Rs.4.00 lacs Above Rs. 4 lakh tax + 2%

PTLR + 1%

11.50% p.a.

education
cess

Repayment

one

year

Period starts completion

from

after one

year

of completion

after
of Not

course or 6 months course or 6 months Available

after securing a job, after securing a job,
whichever
earlier.

is whichever

is

earlier.

Repayment

To be repaid in 5-7 In India : Up to up

Period

years

after Rs. 7.5 lacs - 5-7 years

commencement of years
repayment

to

4
for

unsecured

Above Rs. 7.5 lacs loans and 7

-5-10 years

years

for

In Abroad : Up to secured
Rs. 15 lacs 5-7 loans
years

(against

Above Rs. 15 lacs security of a

 5-10 years

residential
property
shares).

Margin

Upto Rs. 4.00 lacs Upto Rs. 4.00 lacs Not

:

Nil

Nil

Available

Above Rs. 4.00 lacs Above Rs. 4.00 lacs

:

Studies

India 5%

in :

Studies

in

India 5%

Studies in Abroad Studies in Abroad

15%

15%

Processing

No

processing No

processing Not

Fees

fee/upfront charges fee/upfront charges Available

Deposit

of

Rs.

5000/-for education
loan

for

studies

abroad which will

be adjusted in the
margin money

Security

Upto Rs. 4.00

Upto Rs. 4.00

Not

lacs : No Security

lacs : No Security

Available

Above

Rs.

4.00 Above

lacs

Rs.

4.00

: lacs to Rs. 7.50 lacs

Collateral

Security

Third

Party

of Guarantee

Suitable value
(equivalent
100%

of

amount of loan)

Above
to lacs

Rs.
to

Rs.

the lacs(India)

7.50
10
:

Tangible

or co-obligation of Collateral security

parents / guardian / for full value of
third

loan

party.

Above
lacs

Rs.
to

Rs.

lacs(Abroad)

7.50
15
:

Tangible Collateral
security of suitable
value of loan or
third

party

guarantee
security

for

value of loan

full

CONCLUSION

On the basis of above findings and comparison among PNB, SBI and
HSBC it is clearly observe that public banks have more reach, variety and
flexibility in their education loan schemes whereas private banks uses some
new concepts in their offerings like tailor made repayment system.
Maximum loan for studies in India is ranging from Rs. 7.50 lacs to 10.00
lacs and for studies in Abroad it is Rs. 15-20 lacs by public banks and in the
case of private banks, they provide minimum Rs. 50,000 to a maximum of
Rs. 25,00,000 lacs.
Interest rates are vary from 9.5% to 11.5% p.a and PNB uses PTLR system.
All banks have same repayment facility i.e. one year after completion of
course or 6 months after securing a job, whichever is earlier.
Repayment period is also vary from 5-7 year after commencement of
repayment in the case of education loan is taken from public banks and it is
4-7 years on the basis of unsecured and secured education loan taken from
private banks.

Margin is same in PNB and SBI i.e.

Upto Rs. 4.00 lacs

Nil

Above Rs. 4.00 lacs

Studies in India 5%

Studies in Abroad

15%

PNB and SBI do not charge any processing fees but SBI takes Deposit of
Rs. 5000/-for education loan for studies abroad which will be adjusted in
the margin money

RECOMMENDATIONS

 Banks should go for advertisement Campaign from Scratch.

Banks should try to cash its brand image.
Strong branch network should be made and staff personnels
incentives should be increased.
Banks should increase its product line in education loans.
Special scheme for non-professional students as well as for
professional students should be increased.
Banks should introduce some new model keeping in mind the loan
suitable for medium income group customer.
Presence of some famous personality in Advertisement or in
Pamphlets insuring better retention in the mind of customers.
In this age of information, the customer before taking loans
collects all the information about various brands. The banks should
provide a combined booklet of the product range in order to
upgrade the knowledge of future takings of loans.

EDUCATIONAL LOAN APPLICATION FORM FOR HSBC

First Name
Middle Name
Last Name
Address
City
Telephone
Mobile
Email
Date of Birth
Convenient time to contact you
Between

and

Are you interested in a free session on overseas studies with an

Educational Counsellor
Details of the Educational Institute you are planning to study at :
Name
Country
Are you an existing
HSBC customer?
If yes, please provide us the Card No or Account No
Account No.
Credit Card No.

BIBILIOGRAPHY

Books:

Indian Financial System and Commercial Banking , by

IIBF mumbai (page no. 259)

Management of Indian Financial - R.L.Gupta

Websites: www.pnbindia.com
www.statebankofindia.com
www.hsbc.com