Cent Vidyarthi Loan Scheme: Interest Rate, Eligibility, Documents Required

cent vidyarthi loan scheme

Cent Vidyarthi loan scheme is offered by the Central Bank of India to students who need financial assistance to pursue their education either in India or abroad. The scheme covers the fee for the course and other related expenses. This scheme offers loans in two denominations – INR 10 Lakh and INR 20 Lakh, the former is for students who want to study in India while the latter is for students planning to study abroad. The bank has not fixed any bar on the amount of the loan as it provides a higher amount of loan in exchange for 100 percent collateral security. 

Features of Cent Vidyarthi Loan Scheme 

While applying for a loan it is extremely important to do thorough research about the important details related to it. Mentioned below are some of the salient features of the Cent Vidyarthi loan scheme:

Why Choose Cent Vidyarthi Loan Scheme?

  • The amount of the loan is disbursed as a series of payments and given over the required number of years as opposed to a lump sum amount disbursement.
  • It aids students in pursuing their higher education in India and abroad by giving them financial assistance.
  • It is one of the selected loan schemes where the loan amount is disbursed to the borrower as opposed to the institution. Though the borrower needs to provide evidence and receipts in order to avail of this facility.
  •  The loan covers the course fees and other related expenses like purchasing books and laptops, examination fees, hostel fees, etc. that help in completing the course. 

Also Read: Things to Know About Student Loan Servicers Before Getting an Education Loan

Amount of the Loan

The loan amount provided to students who are planning to pursue their education in India is INR 10 Lakh whereas students wanting to study abroad can get a loan amount of INR 20 Lakh. Students can get a higher amount of loan in return for 100 percent collateral security. The amount is basically decided on a case-to-case basis. 

Interest 

  • The interest rate for female students is 8.5% whereas for male students it is 9%. 
  • Students need to pay the interest during the moratorium period also, though they don’t have to pay the principal amount during that period. Students can avail of the benefit of a 1% concession during the moratorium period for the prompt repayment of interest. 

Repayment 

  • The moratorium period for the Cent Vidyarthi loan scheme is the duration of the course plus 12 months or 6 months after getting a job, whichever is earlier. 
  • Loan up to INR 7.5 Lakh – After the moratorium period ends, the beneficiary needs to pay the loan amount for each year in the form of Equated Monthly Installments (EMIs) for up to a period of 10 years. 
  • A loan above INR 7.5 Lakh – After the moratorium period ends, the beneficiary needs to pay the loan amount for each year in the form of Equated Monthly Installments (EMIs) for up to a period of 15 years. 

Also Read: What are the Pros and Cons of Paying-Off Student Loans Early?

Security Required 

  • Loan up to INR 4 Lakh – Under this loan amount, no collateral is mandatory. Parents need to be the co-borrowers of the loan and the student’s assignment of future income is required. 
  • A loan from INR 4 Lakh to INR 7.5 Lakh – Collateral security in the form of a third-party guarantee and the student’s assignment of future income is required. Also, the parents need to be the co-borrowers of the loan. 
  • A loan above INR 7.5 Lakh – Tangible collateral security equivalent to the loan amount or exceeding it is required. Along with this, the student’s assignment of future income is also required. The parents need to be the co-borrowers of the loan. 

Eligibility 

  • The applicant needs to be a resident of India (Indian nationals who have stayed more than 180 days in the last financial year)
  • The applicant must have already secured admission to a recognized institute in India or abroad for higher studies after a merit-based selection process or through entrance.
  • If there is no entrance examination or merit-based selection process and the admission is based on qualifying exams, then the student should have scored at least 50% marks in the qualifying examination. Also, there is a relaxation of 10% for SC/ST students. 

Also Read: Terms and Conditions for Education Loan for Students 

Documents for Cent Vidyarhi Loan Scheme 

  • Proofs of the academic record which entails marksheets and certificates. 
  • Fees-related details with the demand of fees by the institution/university.
  • The prospectus, course details, and admission letter.
  • Proof of residence (anyone) – electricity bill/voter ID card/Passport/Landline telephone bill.
  • Personal ID card (anyone) – PAN card/Aadhar card/Driving license/Passport/Electoral card
  • Photocopy of the PAN card of the student. 
  • Two passport-size photographs of the student, applicant, and guarantor. 
  • Filled out the application form and signed by the applicant and guarantor along with their and family details. 

Margin Money ( Borrower’s fund contribution to the total cost)

Margin money is the amount of money given by the borrower in the overall funds required by them. Following are some of the important details related to the margin money under the Cent Vidyarthi loan scheme: 

  • Loan up to Rs 4 Lakh – There is no need for the borrower to contribute any margin money in order to get the loan. 
  • Loan above Rs.4 Lakh to study in India – The borrower has to give 5% of the loan amount as margin money in order to get the loan. Scholarship can be included in the margin money.  
  • Loan above Rs. 4 Lakh to study abroad – The borrower needs to give 15% of the loan amount as margin money in order to get the loan amount. Scholarship can be included in the margin money.

Processing and Other Charges 

  • When the student is going to study in India – In this case there is no documentation or processing charges levied by the Central Bank of India. 
  • When the student is going to study abroad – The student has to pay INR 500 for a loan amount of up to INR 10 Lakh. If the loan amount is greater than INR 10 Lakh, the processing charges will be INR 1,000. Although the processing charges are refunded to the borrower within 6 months from the date loan is sanctioned and availed by them. 

Other Important Details 

  • The bank can ask the borrower to submit their progress report during their time studying the course.
  • Under the Cent Vidyarthi loan scheme, the loan amount is granted jointly with the guardian/parent (co-borrower) of the applicant.
  • The loan amount is disbursed directly to the school, bookseller, etc. and not to the borrower. Although upon providing the bank with the original receipts, the bank can disburse the amount to the applicant. 

FAQs

Which bank has the lowest interest rate on education loans?

The central bank provides education loans at affordable rates. The lowest interest rate provided by the Central Bank of India is 6.85%. It also provides concession on ROI for backward classes SC/ST students and female students. 

What is the Cent Vidyarthi scheme?

Cent Vidyarthi is a loan scheme offered by the Central Bank of India to students in order to help them by providing them with financial assistance for their higher education. A loan amount of INR 10 Lakh is given to students who want to study in India whereas an amount of INR 20 Lakh is given to students planning to study abroad. A higher amount of loan can be sanctioned under this scheme if the borrower provides 100% collateral security. 

What is the minimum CIBIL score for an education loan?

The minimum CIBIL score required for an education loan is 685. 

This is everything you need to know about the Cent Vidyarthi loan scheme offered by the Central Bank of India! Worried about the financial hurdles you are facing for your study abroad dreams? Let Fly Finance help you and make your dreams come true! 

About Prachi Gupta

Prachi is a SEO content writer who have written many well researched blogs in the field of Finance and Education loans. Through her critical thinking and problem solving skills she strives to help students so that they can overcome financial hurdles in their education journey. She comes up with creative answers for students looking for financial aid by fusing her in-depth financial expertise with her compassionate attitude. She is a sought-after expert in the sector due to her dedication to demystifying complicated financial topics. Numerous students have received the advice they require from her articles and thorough guides, enabling them to overcome financial obstacles and realise their educational aspirations.

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