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Union Bank of India Education Special Scheme for Abroad Studies by Union Bank of India offers loans up to ₹150 lakh for Indian students pursuing postgraduate courses abroad, with terms varying by institute category (A or B).

Overview of the Scheme

The scheme, named "UNION EDUCATION PREMIER ABROAD," categorizes institutes into 'Category A' and 'Category B,' each with tailored loan provisions to meet the financial needs of students based on the institute's ranking and location. 

Loan Categories and Amounts

The scheme divides institutes into two categories, with different loan limits:

• Category 'A': Includes top-tier institutes such as Harvard University (USA), University of Oxford (UK), and University of Toronto (Canada). Loans can be: 
  • Up to ₹40.00 lakh without collateral.
  • Up to ₹150.00 lakh with collateral, depending on coverage (50% to 100% or more).
• Category 'B': Includes institutes like University of Colorado Boulder (USA) and City University of Hong Kong. Loans can be: 
  • Up to ₹30.00 lakh without collateral.
  • Up to ₹150.00 lakh with collateral, similar to Category A.

This categorization ensures that students at premier institutes have access to higher loan amounts, reflecting the potentially higher costs associated with these institutions.

Interest Rates

Interest rates are linked to the bank's External Benchmark Lending Rate (EBLR).The rates vary based on the loan amount and collateral:

• Category 'A': 
  • Up to ₹40.00 lakh (no collateral): EBLR + 0.50% (effectively 9.50% based on 9.00% EBLR).
  • Up to ₹150.00 lakh (50% to <100% collateral): EBLR + 0.25% (9.25%).
  • Up to ₹150.00 lakh (100% and above collateral): EBLR (9.00%).
• Category 'B': 
  • Up to ₹30.00 lakh (no collateral): EBLR + 0.75% (9.75%).
  • Up to ₹150.00 lakh (50% to <100% collateral): EBLR + 0.50% (9.50%).
  • Up to ₹150.00 lakh (100% and above collateral): EBLR (9.00%).

The EBLR is reset at least once every three months or as prescribed by the bank/RBI, with the spread fixed for 3 years, and the first reset occurring 3 years from the date of sanction. This structure provides predictability for borrowers over the initial period.

Processing Charges

Processing charges are non-refundable and collected upfront:

• Up to ₹40.00 lakh: ₹10,000 + applicable GST.
• Above ₹40.00 lakh: ₹20,000 + applicable GST.

These charges ensure the bank covers administrative costs, and borrowers should factor them into their financial planning.

Eligibility Criteria

To be eligible, applicants must:

• Be Indian nationals.
• Have secured admission in a full-time postgraduate course abroad through recognized entrance exams or approved authorities.
• The institute must be listed under Category 'A' or 'Category B' in the circular.

The circular includes extensive lists of eligible universities:

• Category 'A': Includes 160 institutes, covering countries like the USA, UK, Canada, Australia, China, and more. Courses include Medical, STEM, Law, Economics & Econometrics, Art, Performing Arts, Design, and Management.
• Category 'B': Includes 100 institutes, with similar course offerings, covering countries like the USA, UK, Canada, Germany, and others.

Below is a detailed table summarizing the institutes for each category.

Category A Institutes

Category B Institutes

Expenses Covered

The loan covers a wide range of expenses, ensuring students have comprehensive financial support:

• Tuition fees.
• Hostel/mess charges.
• Examination/library/lab fees.
• Insurance premium.
• Travel expenses.
• Books/equipment, including computers/laptops.
• Other course-related expenses.

There are caps on certain expenditures, such as caution deposits not exceeding 10% of tuition fees, to ensure funds are used appropriately for educational purposes.

Repayment and Moratorium

Repayment terms are structured to ease financial burden during studies:

• Repayment Period: 180 months (15 years) after the moratorium period.
• Moratorium Period: Course duration + 1 year, allowing students to focus on studies without immediate repayment pressure.

This extended moratorium and repayment period provide flexibility, especially for students entering high-cost programs abroad.

Security and Co-applicant Requirements

Security and co-applicant terms are designed to balance risk for the bank and accessibility for students:

• No collateral or third-party guarantee is required for loans up to ₹40.00 lakh for Category A and ₹30.00 lakh for Category B.
• For higher amounts, collateral coverage is required: 
  • Minimum 50% collateral for loans between 50% and <100% coverage.
  • 100% and above collateral for higher loans, with potential for no margin if fully secured.

Either parent or spouse must be a co-applicant/guarantor, but their income is not considered for loan sanctioning, ensuring the focus remains on the student's financial need rather than co-applicant's income.

Margin Requirements

Margin requirements ensure borrowers contribute a portion of the costs, with variations based on loan amount and category:

• Category 'A': 
  • Above ₹7.50 lakh to ₹40.00 lakh: 15% margin.
  • Above ₹40.00 lakh to ₹150.00 lakh: If 100% collateral, margin is NIL; otherwise, 15% with at least 50% collateral.
• Category 'B': 
  • Above ₹7.50 lakh to ₹30.00 lakh: 15% margin.
  • Above ₹30.00 lakh to ₹150.00 lakh: If 100% collateral, margin is NIL; otherwise, 15% with at least 50% collateral.

For universities in Germany where no tuition fee is charged, expenses like books, hostel, and mess charges are funded with a minimum margin of 30%, irrespective of the loan amount. Scholarships received must be credited to the loan account, treated as margin.

Below is a table summarizing margin requirements:

Additional Features

Several additional features enhance the scheme's appeal:

• Insurance: Term life insurance is mandatory, with premiums optionally included in the loan, providing security for both the bank and the borrower.
• Exclusions: NRI students are not eligible, focusing the scheme on resident Indian students.
• Operational Guidelines: The bank offers relaxations, such as optional bank statements for applicants and no need for income proof or business verification of co-applicants/guarantors, encouraging branches to maximize business under this scheme.

Conclusion and Recommendations

The Union Education Special Scheme for Abroad Studies offers a robust framework for financing higher education abroad, with competitive loan amounts, flexible interest rates, and comprehensive expense coverage. The inclusion of detailed lists for Category A and B institutes ensures transparency for applicants. One should verify with Union Bank of India for any updates, especially regarding interest rates (EBLR) and processing charges, which may have changed. This scheme is particularly beneficial for students aiming for premier institutes, with clear guidelines on eligibility and repayment, ensuring accessibility and financial planning ease.

Apply today at https://shikshavahini.com/apply-for-loan and take the first step toward your academic future—without financial stress!