Thousands of Indian students travel abroad for education each year. For many of these, a degree from abroad opens up opportunities that are not available in India.
But education abroad comes at a steep cost. For instance, a postgraduate MS degree from a reputed university in the USA can be expensive, requiring as much as ₹40 lakhs for the two-year duration. Naturally, many students turn to education loans to bridge the gap between the cost and their financial resources.
The Central Bank of India is one of the more popular choices for students as it offers education loans that are affordable and have attractive benefits. This article explores all aspects of the Central Bank of India education loan schemes, including interest rates, application process, and more.
Central Bank of India education loan schemes for India and abroad
The Central Bank of India extends various types of education loan schemes. These are known as Cent Vidyarthi education loan programs. These loan products from Central Bank are ideal for students who need financial aid for higher education in India and abroad:
Cent Vidyarthi Scheme
This scheme is for students who want to pursue higher education in India and abroad. It covers a wide range of courses, including undergraduate and postgraduate programs. The maximum loan amount available under this scheme is ₹2 crores.
Cent Tech Vidyarthi
The Cent Tech Vidyarthi Educational Loan finances students pursuing studies at IITs. Eligible applicants must have secured admission to an IIT through a competitive entrance test. The maximum loan amount is ₹15 lakhs.
Cent Vidyarthi For Executive MBA
This is for students who want to pursue an executive MBA at an Indian institute. The applicant must possess at least 2 years of work experience. The maximum loan amount is up to ₹40 lakhs.
Cent Education Loan for IIMs & Other Premier Management Institutes
Students who want to pursue full-time MBAs at IIMs and other premier management institutes can avail of this loan. There is no need for any collateral to avail this loan.
Besides, the bank also offers Cent Skill Loans for students who have secured admission to ITIs and polytechnics.
Also Read: Education loan for Study Abroad Guide for Students
Expenses covered under the Central Bank of India education loan for abroad and India
The Central Bank of India education loans provide financial assistance for a range of educational expenses. Here are the costs covered by the Central Bank education loan:
- Tuition fees for college and university including on-campus boarding
- Additional fees for examination, library, and laboratory
- Travel costs for studies abroad
- Student insurance premiums (if applicable)
- Refundable deposits such as caution and building fund
- Educational materials including books, equipment, instruments, etc
- Computer purchase (if necessary)
- Other course-related expenses including
- Study tours
- Project work
- Thesis development
The bank takes into account any scholarships, fee waivers, or other types of financial aid the student receives when calculating financial requirements.
The Central Bank of India offers very attractive interest rates on education loans. In the next section we focus on the various loan rates charged by the bank.
Interest Rates for Central Bank of India education loans
The Central Bank of India’s education loans carry low interest rates. Interest rates on these education loans can start from as low as 8.05%.
Here is a table showing the effective rates for various education loan categories:
| Category | ROI (annual) |
| Education loans to Students Pursuing an MBA from IIM Institutes under the AAA category | |
| For Loans up to ₹20 Lakh | 8.05% |
| For Loans above ₹20 Lakh | 8.10% |
| Education loan to Students Pursuing Engineering courses (Under Cent Tech Vidyarthi) from IITs under the AAA category | 8.10% |
| Education loans to Students Pursuing MBA / Engineering courses (Under Cent Tech Vidyarthi) from IIMs / IITs & other Premier Management Institutes under the AA category | 8.20% |
| Education loans to Students Pursuing MBA / Medical / Engineering courses from Reputed Institutes under A category with collateral security | 9.00% |
| Education loans to Students Pursuing MBA / Medical / Engineering courses from renowned Institutes under the B category with collateral security | 10.30% |
| Education loans to Students Pursuing MBA / Medical / Engineering courses from other popular Institutes under the C category with collateral security | 10.60% |
| Cent Vidyarthi Loan for education in Top Rated Management / Engineering / Medical Institutions Abroad under the D category with collateral security | 10.30% |
| Cent Vidyarthi Loan – NCGTC Guaranteed Scheme | 10.60% |
The Central Bank of India gives a 1% interest rate discount if the borrower pays interest during the study and moratorium period. At this time interest is calculated using simple interest.
Disclaimer: The information provided in this table regarding various loan products and interest rates is accurate as of October 2024. However, interest rates and other terms and conditions may change over time. Please reach out to the bank or ask an education loan expert at FundRight for information in case of any doubt.
Margin Requirements
An education loan commonly requires a margin amount. Margin money is the percentage of the total education cost that the borrower is responsible for paying.
The margin on education loans offered by the Central Bank of India varies based on the loan amount and the country of study. Here is an overview:
- Loans up to ₹4 Lakhs: No margin required
- Loans in India above ₹4 Lakhs: A margin of 5% is applicable
- Loans for studies abroad above ₹4 Lakhs: A margin of 15% is applicable
In the next section, we look at the various documents you have to submit with your application for quick processing of your education loan to study abroad.
Also Read: How to Get an Education Loan without Parental Support?
Documents required for Central Bank of India education loan for abroad and India
Disclaimer: The information provided in this section applies to education loans for both domestic (Indian) and international (abroad) studies. While most documents required are common for both cases, specific requirements may vary. Please reach out to the bank or FundRight for information in case of any doubt.
To avail of a Central Bank of India education loan, students have to submit a variety of documents. These include government-issued ID proofs, academic records and financial information.
Here’s a table with a summary of the documents required for the Central Bank of India education loan:
| Category | Documents Required |
| Applicant’s Documents | |
| Government-issued ID (PAN, Passport, Driver’s License, Voter ID, or Aadhaar card) | |
| Completed education loan application form | |
| Address verification (utility bill, Driving License, or Aadhaar card) | |
| Academic records: | |
| 10th standard marks sheet | |
| 12th standard marks sheet | |
| Undergraduate semester-wise results | |
| Entrance exam scores (GMAT, GRE, TOEFL, etc.) | |
| Proof of admission (admission letter or conditional admission letter) | |
| Detailed statement of expenses | |
| Co-Applicant’s Documents | |
| Government-issued ID (PAN, Passport, Driver’s License, Voter ID, or Aadhaar card) | |
| Address verification (utility bill, Driving License, or Aadhaar card) | |
| Two passport-size photographs | |
| Bank account statement (last 6 months, for loan takeover) | |
| Co-Applicant/Guarantor Income Proof | |
| Salaried Individuals: | Recent salary slips (3 months) |
| Form 16 copies (last 2 years) | |
| Salary account bank statement (last 6 months) | |
| Asset and liability statement | |
| Self-Employed Individuals: | Business address proof |
| IT returns (last 2 years) | |
| TDS certificate (Form 16A, if applicable) | |
| Professional certification (CA, doctor, etc.) | |
| Asset and liability statement | |
| Bank account statement (last 6 months) |
Depending on your application and individual profile the bank might ask for additional documents.
How to apply for a Central Bank of India education loan for India and abroad?
Here’s a step-by-step guide to the education loan application process to help you finance your studies:
Visit a Branch
Visit a nearby Central Bank of India branch. The Central Bank offers multiple loan products as outlined above. Ask for guidance from the bank personnel and select a scheme that suits your needs. Then submit the required application with documents.
Apply Online
Go to the Central Bank of India’s official website. Navigate to the Education Loans section and select your preferred loan option. Then, register and fill in your information on the website.
It is very easy to apply for a loan if you have the required documents. At every step, the bank personnel will help you in case you have any questions.
If you’re considering a Central Bank of India education loan, FundRight (by GradRight) can make the process even easier and more rewarding.
- Create a single online account, and instantly access Central Bank’s loan offer along with offers from 14 other top Indian and international lenders. No need to fill out separate applications.
- Compare multiple options side by side, ensuring you find the lowest interest rates and best repayment terms.
- Get guidance from an unbiased financial advisor to help you select the most suitable loan.
- Track live loan offers with a personal dashboard, keeping everything organized in one place.
- Upload your documents once—saving you time and avoiding repeated paperwork.
FundRight is completely free for students, giving you access to the best possible loan terms with minimal effort. Sign up today and simplify your loan journey.
Also Read: Non Collateral Education Loan for Study Abroad: How To Apply?
Advantages of Central Bank of India education loan
There are multiple benefits to choosing an education loan from the Central Bank of India. Here are the key advantages:
Affordable Interest Rates
As the table above shows the interest rates begin from 8.05%. This is the cheapest education loan to study abroad. Only the State Bank of India matches this rate and most private sector banks charge at least 2-3% more.
Affordability is a huge concern because on a loan of ₹50 lakhs, a difference of a percent over a decade can be a significant amount.
Sufficient Moratorium Period
During your studies, you won’t need to pay EMIs for loan repayment. The moratorium period extends even after you complete your degree, giving you time to secure employment before repayments begin. This period, where you aren’t required to make any payments, is known as the moratorium period. Central Bank of India provides a generous one-year moratorium after you graduate, giving you ample time to find a suitable job and comfortably start your EMI payments.
Low Margin Rates
When taking an education loan, the borrower must contribute a portion of the total study cost, known as margin money, from their own resources. A high margin requirement can add financial pressure on students. Central Bank of India offers a reasonable margin rate for its education loans:
Loans up to ₹4 lakhs: No margin required
Domestic loans above ₹4 lakhs: 5% margin
International loans above ₹4 lakhs: 15% margin
For example, if you take a ₹30 lakh loan for studying abroad, you would need to provide 15% as margin money, which amounts to ₹4.5 lakhs from your own funds. This balanced margin policy helps reduce the financial strain on students.
Long Tenure
The Central Bank of India education loan carries a lengthy tenure of 15 years. Of course, a longer tenure would mean an overall larger interest payment. However many borrowers prefer a longer tenure because it allows them to make smaller payments each month.
For most students at the beginning of their career affordability is the main concern. For them, this loan scheme is perfect in every aspect.
Zero Processing Fee
The Central Bank of India education loan requires no processing fee. Banks require processing fees for the administrative burden of a loan. It is usually 1-2% of the loan amount.
But a Central Bank education loan for study in India is processed free of charge. For students going abroad the processing fee is ₹1,000.
Also Read: Union Bank Education Loan to Study Abroad: Interest Rates, Documents, Eligibility & More
Features and benefits of Central Bank of India education loan
The features and benefits of Central Bank of India education loans make them a suitable option for students in India and abroad.
Here are the key features of the Central Bank of India education loan:
- The bank offers cheap interest rates that are highly affordable and within reach.
- The Central Bank of India education loan can be repaid over 15 years if needed, lowering the EMI burden.
- Students must buy a life insurance policy covering the full loan amount. This ensures that no burden falls on co-borrowers in case anything drastic happens.
- The moratorium period extends over the course duration plus one year. It offers flexibility for students to begin repayment after securing a job.
Benefits of Central Bank of India education loan
- The bank is very efficient and offers timely disbursal of education loans. Usually, a loan can be approved in as little as 15 days.
- The Central Bank operates 4,500 branches across 28 states. The pan-India presence means there is a branch close to your home.
- There is no penalty for early repayment of your loan. If you earn more, you can pay back the entire loan burden or prepay several EMIs without any fees.
FAQs
Any citizen of India can apply for an education loan from the Central Bank of India. There is no application or processing fee and a very reasonable requirement of collateral is necessary in some cases.
The Central Bank of India’s education loan rate of interest begins from 8.05% for loans given for study at IIMs. Different categories of loans have different interest rates as outlined in the table above. Education loans for study abroad from the Central Bank have an interest rate of 10.3%.
Like most other banks, the Central Bank of India does not provide any public information about CIBIL scores needed for loan sanction. The loan approval depends on several factors including collateral offered, CIBIL score, and institution. Usually, public sector banks prefer a CIBIL score of 700 or more.
Yes, life insurance is mandatory if you take an education loan from the Central Bank of India. You have to purchase a life insurance policy that covers the full loan amount and spans the entire loan period. The bank must be the beneficiary of the policy.
