Federal Bank provides education loans to study abroad under the Special Vidya Loan scheme. The bank provides a maximum of up to INR 20 lakhs for higher education at interest rates starting from 12.55%. Aspiring students prefer Federal Bank education loans due to their speedy approval and hassle-free disbursement process. The Federal Bank education loan disbursement process takes 7-10 days to process the education loans and disburse the loan amount within 28-48 hours after completion of all formalities.
In this blog, we will discuss the disbursement process of education loans at Federal steps and cover all the important steps in detail. This will also help you get a fair idea of Federal Bank education loans.
Table of contents
Steps of Federal Bank Education Loan Disbursement Process
Education loan disbursement is the final step in the educational journey. The funds are transferred to the university’s account on the student’s behalf. The Federal Bank disbursement process is simple and quick once you provide all the necessary information and documents on time. The bank initiates the loan disbursal after the following steps-
- Submission of education loan application form
- Submission of all the required documents
- Signed loan sanction letter
- Disbursement request form
- Documents related to disbursement
Let’s understand these steps in detail.
Also Read: Know all about how to apply for a Union Bank Education Loan through Vidya Lakshmi Portal
Application Form and Documents Verification
The applicant needs to submit the education loan application form and attach all the required documents. Make sure to fill in all the details correctly and avoid making mistakes. The documents related to identity proof, address, income, collateral, academic mark sheets, salary slips, ITR and others must be kept handy.
Once submitted, the banks will verify all the documents and decide the education loan amount based on factors like the applicant’s study-abroad expenses, academic performance, course and country chosen, collateral value, family income and creditworthiness.
Loan Approval and Sanction Letter
After the verification of documents and subject to fulfilment of eligibility criteria, the bank approves the education loan. It will then provide you with a loan sanction letter. The loan sanction letter would contain all the details like the loan amount, interest rates, repayment period, moratorium period, margin money, and other important terms and conditions related to an education loan taken.
The applicant is required to pay the margin money, stamp duty, and processing fees in time to avoid delay in the loan disbursement process. Also, the applicant is required to sign the loan sanction letter after reading the conditions carefully.
Education Loan Disbursement Process at Federal Bank
The Federal Bank education loan disbursement process is initiated after the applicant signs the loan sanction letter. The process can be easily understood by dividing it into three steps. Applicants can follow these simple steps to ensure trouble-free disbursement process-
Collection of Documents
The applicant must collect and submit all the documents to the bank for them to start the disbursement process. These documents include an admission letter from the university, fee structure, accommodation expenses, rent agreement (in case of off-campus accommodation), and a guess estimate of other related expenses.
Loan Disbursement Letter
The student must sign the loan disbursement letter which contains details like amount, date and mode of disbursement. This has to be signed by the applicant for the bank to initiate actual disbursement.
Actual Disbursement
The actual disbursement is made to the university once all the details have been confirmed to the bank and the disbursement letter is signed.
Also Read: If you are planning to avail of an education loan from SBI, check out our blog to understand the SBI Education Loan Disbursement Process.
Documents Required for Federal Bank Education Loan Disbursement
For the banks to initiate the education loan disbursement process, the applicant must submit the list of documents. These documents act as proof of expenses.
- Proof of admission from the University
- Tuition fee structure
- Accommodation fee breakup and rent agreement documents
- Estimate of average living costs
- Estimate of miscellaneous expenses including health insurance, travel costs, study aids, and incidental expenses.
- The self-attested final loan agreement
- Disbursement request form signed by the applicant and co-applicant
- Receipt of margin money paid to the college/university along with the bank statement reflecting the transaction
- Complete two copies of the ECS mandate form, ensuring it is signed and stamped by your bank. One copy should be submitted to the bank manager for record-keeping after determining the disbursement date.
FAQs
The bank takes 7-10 days to process the education loans and disburse the loan amount within 28-48 hours after completion of all required formalities.
Disbursement of an education loan means the transfer of funds from the lender to the university’s account on the student’s behalf.
Federal Bank education loan interest rates begin from 12.55% to provide financing up to INR 20 lakhs.
The students can not receive the education loan disbursement in their accounts. The tuition fees and on-campus accommodation expenses are transferred to the university’s account. Only off-campus accommodation can be credited to the personal bank account.
Applicant must submit the education loan application form and attach the required documents. The bank will verify the documents and subject to fulfilment of the eligibility criteria, the bank will issue a loan sanction letter. After signing it, the bank initiates the education loan disbursement.
This was all about the Federal Bank education loan disbursement process. It is important to understand the steps involved and carefully read the terms and conditions stated in the sanction letter.
To know more about the loan application process, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
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