IDFC First Bank offers easy financing for pursuing higher education in India or abroad. Understanding aspiring students’ ambitions and needs, the bank provides education loans of up to INR 50 lakhs without collateral and INR 1 crore with collateral. What makes this bank the most preferable choice among students are the attractive interest rates starting from 9% p.a., faster loan sanctioning, and hassle-free education loan disbursement process. Here’s an overview of IDFC First Bank education loans-
| Quantum of Finance | Up to INR 50 lakhs (without collateral) Up to INR 1 crore (with collateral) |
| Interest Rates | 9%-15% p.a. |
| Repayment Tenure | Up to 15 years |
| Other Benefits | Income Tax Rebate on Education loans under Section 80E Up to 100% financing Education financing at your doorstep |
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Also Read: If you are planning to avail an education loan from PNB Bank, check out our blog to understand the PNB Bank Education Loan Disbursement Process.
Education Loan Disbursement Process
Let’s begin by understanding what loan disbursement means. Well, it is the transfer of funds from the lender to the borrower. In this step, the loan amount borrowed is credited and can now be used to cover the expenses. Usually, when a loan is taken to pursue higher education, most banks transfer or release the funds into the university’s account on behalf of students, instead of personal accounts.
Education loan disbursement can take place in instalments throughout the academic year or in lump sums, which are utilised to cover costs like tuition fees, accommodation expenses, and other related study-abroad expenses.
IDFC First Bank Education Loan Disbursement Process
Consider Mahesh, a student aspiring to pursue higher education in the UK, who decides to avail of an education loan from IDFC First Bank. He follows the subsequent steps involved in availing an education loan from the bank, which includes filling out the application form, submitting the required documents, signing the loan sanction letter, and finally loan disbursement. Now, let us understand the IDFC First Bank education loan disbursement process which takes place in 3 phases:
Phase 1: Before Disbursement
Step 1: Filling out to Application Form
In the first step, Mahesh begins his journey by filling out the application form. This can be done either by visiting the nearest IDFC Bank branch office or online through the bank’s official website. He also submits necessary documents related to address proof, income proof, academic records, and an acceptance letter from the university.
Step 2: Verification of Documents
After applying, Mahesh waits for the bank to verify his details. This step includes verification of documents submitted like mark sheets for academic records, demand/ acceptance letters from the university, and documents related to address, income, identity, and collateral. This process usually takes a few days as the bank verifies documents based on various factors like credit history and course details.
Step 3: Deciding the Loan Amount
Upon successful verification of documents by the bank, IDFC First Bank assesses Mahesh’s eligibility criteria and determines the loan amount based on the course fees and living expenses. This step also includes a discussion on deciding the interest rates, repayment period, moratorium period, and other necessary terms and conditions.
Step 4: Signing the Loan Sanction Letter
Once the loan amount is decided, Mahesh will receive an education loan sanction letter from IDFC First Bank. This document outlines the final terms and conditions of the loan stating the agreed rate of interest, repayment schedule, and other important details.
Step 5: Finalizing Loan Agreement
After carefully reviewing the terms mentioned in the sanction letter, Mahesh proceeded to finalize the loan agreement with the bank. A loan agreement is an important document which is a formal contract outlining a clear understanding of the applicant’s responsibilities and obligations.
In this step, Mahesh needs to sign the loan agreement letter for the bank to commence the disbursement process.
Also Read: Going abroad for studies? Check out this useful information on how the exchange rates are calculated and stay informed while exchanging currency abroad.
Phase 2: During Disbursement
Step 6: Formal Request for Disbursement
After having signed the education loan agreement and sanction letter, Mahesh initiates the disbursement process by submitting a formal request to IDFC First Bank in this step. This request includes the submission of documents (list discussed in detail at the end) of the final course fee structure and any other associated expenses.
Step 7: Verification of Final Documents
The bank conducts a final verification of all submitted documents, ensuring that everything aligns with the agreed terms. Mahesh remains in close contact with the bank during this phase to address any additional requirements promptly.
Step 8: Deciding Disbursement Details
IDFC First Bank, after thorough verification, contacts Mahesh to decide on the disbursement amount, date, and method (wire transfer or forex transfer).
Step 9: Fund Transfer
On the agreed date, amount and method of disbursement, IDFC First Bank transfers the sanctioned loan amount to the university’s account (tuition fees and on-campus accommodation funds), ensuring that Mahesh’s financial needs for his education in the UK are met.
Please Note: If Mahesh opts for off-campus accommodation, then that amount will be transferred to his account. The bank might also consider transferring off-campus living expenses to the university only. In such a case, Mahesh will have to coordinate with the university regarding receiving those funds to pay for rentals
Phase 3: Post Disbursement
Step 10: Disbursement Support
Post disbursement, Mahesh receives ongoing support from IDFC First Bank. The bank facilitates the transfer of funds in multiple instalments as required, aligning with the academic calendar and his financial needs.
Documents required for IDFC First Bank Education Loan Disbursement Process
As discussed above in Step 6, Mahesh needs to provide certain documents to initiate the education loan disbursement process along with submitting a formal request to IDFC First Bank. Here is the list of documents (in detail) that must be submitted as proof of study-abroad expenses, as based on these documents, the bank ascertains the loan disbursal amount.
- An acceptance letter from a university or college
- Accommodation fee breakup (in case of on-site accommodation)
- Rent agreement documents (in case of off-site accommodation)
- Guess estimate of average living costs like food, clothing, electronic gadgets, books, and other study materials
- Guess the 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
- Submit the original KYC documents for the student, co-applicant, and guarantor (if applicable).
- 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.
Also Read: Know all about how to apply for a Union Bank Education Loan through Vidya Lakshmi Portal
FAQs on IDFC First Bank Education Loan Disbursement Process
IDFC First Bank is known for its faster loan sanctioning and disbursement process. It may disburse the loan amount within one hour under special cases.
IDFC First Bank has an efficient and streamlined education loan disbursement process, making it one of the preferred choices among students to avail of IDFC First Bank education loans to study abroad.
After submitting the disbursement-related documents, the bank will issue the disbursement letter stating the amount, date and method of disbursement. On signing it, the bank will disburse the funds directly to the university’s account.
The following documents must be provided by the students to ensure a hassle-free IDFC First bank loan disbursement process– the university’s offer letter with a stated fee structure, accommodation fee break up, rent agreement documents, an estimate of average living costs and miscellaneous expenses.
All the major expenses such as tuition fees, accommodation costs etc. are transferred directly to the university’s account on behalf of the student. If the loan amount covers off-campus accommodation, then the amount for the same may get transferred to the student’s account.
This was all about the IDFC First Bank Education Loan Disbursement Process. Following the above-mentioned steps will help an applicant experience a smooth and transparent education loan disbursement process with IDFC First Bank, enabling all aspiring students to pursue their global dreams without any financial stress.
To know more about the education 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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