Features of Bank of Baroda Unsecured Education Loans
- No Collateral Requirement: Unsecured loans do not require tangible collateral (e.g., property or fixed deposits) for loan amounts up to ₹40 lakh for premier institutions in India and abroad. For other institutes, collateral-free loans are available up to ₹7.5 lakh. This makes the loan accessible to students who may not have assets to pledge, reducing financial barriers to education.
- Loan Amount: For Studies in India: Up to ₹40 lakh without collateral for premier institutions (e.g., IIMs, IITs, medical colleges). For non-premier institutes, up to ₹7.5 lakh without collateral. For Studies Abroad: Up to ₹40 lakh without collateral for premier institutions under schemes like Baroda Scholar. Higher loan amounts (up to ₹125 lakh for India and ₹150 lakh for abroad) may require collateral, but unsecured options are prioritized for premier institutes.
- Competitive Interest Rates: Bank of Baroda provides interest rates starting at 8.15% per annum, with variations based on the scheme, course, and institution. For example: Baroda Gyan (for studies in India) offers 11.40% to 13.05% p.a., while Baroda Scholar (for studies abroad) starts from BRLLR + 1.75% (approximately 11.05% to 11.15% p.a.). Female students receive a 0.5% interest rate concession, enhancing affordability.
- Flexible Repayment Tenure: The repayment periods extend up to 15 years (after the moratorium period), allowing manageable equated monthly installments (EMIs). For loans up to ₹7.5 lakh, the repayment tenure is up to 10 years. For loans above ₹7.5 lakh, it can go up to 15 years. The moratorium period (course duration + 12 months or 6 months after securing a job, whichever is earlier) provides a grace period before EMIs begin, easing the transition to repayment.
- No Processing Fees: Bank of Baroda charges zero processing fees for unsecured education loans up to ₹7.5 lakh. For loans above ₹7.5 lakh, a 1% processing fee (up to ₹10,000) may apply but is refunded upon the first disbursement for premier institutions. This reduces the upfront cost for students and families.
- Coverage of Expenses: The loan covers a wide range of education-related
expenses, including:
- Tuition fees, examination fees, library/laboratory fees
- Hostel fees, lodging, and boarding charges
- Purchase of books, equipment, instruments, uniforms, and computers/laptops
- Travel expenses for studies abroad
- Insurance premium for the student borrower (mandatory for loans above ₹7.5 lakh)
- Other expenses like study tours, project work, or thesis, capped at 20% of the total loan amount
- Tax Benefits: Interest paid on the education loan is eligible for a tax deduction under Section 80E of the Income Tax Act, 1961, for up to 8 years. This applies to the full interest amount paid, with no upper limit, reducing the effective cost of borrowing.
- Eligibility Criteria: The applicant must be an Indian citizen or a Non-Resident Indian (NRI)/Person of Indian Origin (PIO)/Overseas Citizen of India (OCI) with admission to a recognized institution. Courses covered include graduation, post-graduation, professional courses (e.g., engineering, medical, law, management), and technical courses offered by reputed institutions. For abroad studies, courses like MBA, MCA, MS, and those conducted by CIMA (London) or CPA (USA) are eligible. No specific age restriction applies, and minors can apply through parents/guardians.
- Co-Applicant Requirement: A co-applicant (typically parents, spouse, or parents-in-law) is mandatory for unsecured loans. For loans up to ₹4 lakh, no third-party guarantor is required, but for loans above ₹4 lakh, a guarantor may be needed. For premier institutions, the co-applicant requirement may be waived in some cases under the Digital Education Loan scheme.
- Simplified Application Process: Applications can be submitted online via the Bank of Baroda website or the Vidya Lakshmi portal, reducing paperwork. The Digital Education Loan scheme allows paperless processing, with digitally generated bank statements and ITRs accepted. Physical document submission is not mandatory unless additional verification is required. Applications through platforms like GyanDhan can bypass branch-level processing, directly routing to the Specialized Mortgage Store (SMS) for faster approval (15-20 days vs. 30-45 days for branch applications).
- Repayment Options: EMIs can be paid via:
- Standing Instruction (SI) for Bank of Baroda account holders
- Electronic Clearing Service (ECS) for non-Bank of Baroda accounts
- Post-dated cheques (PDCs) at non-ECS locations
- Special Schemes:
- Baroda Gyan: For higher education in India, covering undergraduate, postgraduate, and professional courses. Unsecured loans up to ₹40 lakh for premier institutes.
- Baroda Scholar: For studies abroad, offering unsecured loans up to ₹40 lakh for premier institutions.
- Affordable Financing:
Competitive Interest Rates: Starting at 8.15% p.a., with rates like 11.05%–13.05% for
schemes like Baroda Gyan and Baroda Scholar. Female students receive a 0.5% rate
concession, enhancing affordability.
- No Processing Fees: Zero fees for loans up to ₹7.5 lakh, and for higher amounts, fees (up to ₹10,000) are refunded upon first disbursement for premier institutions.
- Simple Interest During Moratorium: Interest is charged as simple interest during the course duration plus 12 months, avoiding compounding and reducing the overall cost.
- Tax Benefits: Interest paid on the loan qualifies for a tax deduction under Section 80E of the Income Tax Act, 1961, for up to 8 years.
- Comprehensive Expense Coverage: Covers a wide range of education-related costs, including: Tuition, examination, library, and laboratory fees. Hostel, lodging, and boarding charges. Books, equipment, uniforms, and laptops.
- Flexible Repayment Terms: Long Repayment Tenure: Up to 10 years for loans up to ₹7.5 lakh and 15 years for higher amounts, resulting in manageable EMIs.
- Moratorium Period: No repayments required during the course duration plus 12 months (or 6 months after securing a job), allowing students to focus on studies and job placement.
- No Prepayment Penalties: Borrowers can repay the loan early without additional charges, saving on interest costs.
- Quick and Convenient Application Process:
- Digital Application: The Baroda Digital Education Loan scheme offers a paperless process via the bank's website or platforms like Vidya Lakshmi and GyanDhan. Digitally generated documents are accepted, minimizing paperwork.
- Fast Processing: Applications through platforms like GyanDhan are routed to the Specialized Mortgage Store (SMS), reducing approval time to 15–20 days compared to 30–45 days for branch applications.
- Online EMI Calculator: Tools on the Bank of Baroda website or BankBazaar help borrowers plan repayments by estimating EMIs based on loan amount, tenure, and interest rate.
- Support for Diverse Educational Goals: Funds a variety of courses, including undergraduate, postgraduate, professional (e.g., engineering, medical, law, management), and skill-based programs in India and abroad.
- Financial Protection: For loans above ₹7.5 lakh, mandatory Group Credit Life Insurance or Term Insurance safeguards the borrower's family from repayment obligations in case of unforeseen events.
- Empowerment Through Education: By removing the need for collateral, these loans enable students from middle- and lower-income backgrounds to pursue high-quality education at premier institutions.
- Baroda Gyan: For studies in India, offering up to ₹40 lakh without collateral for premier institutes.
- Baroda Scholar: For studies abroad, with similar collateral-free limits for top universities.
- Baroda Digital Education Loan: Streamlines applications for tech-savvy borrowers, with relaxed co-applicant norms for premier institutions. These schemes cater to specific needs, ensuring tailored financial solutions.
- Transparent and Borrower-Friendly Terms: Direct disbursements to institutions/vendors prevent misuse of funds, while flexible repayment options (Standing Instruction, ECS, or post-dated cheques) suit borrower preferences.
- No Processing Fees: Zero fees for loans up to ₹7.5 lakh, and for higher amounts, fees (up to ₹10,000) are refunded upon first disbursement for premier institutions.
Frequently Asked Questions (FAQs)
What is the maximum loan amount available under Bank of Baroda's unsecured
education loan?
Bank of Baroda offers up to ₹40 lakh without collateral for premier institutions (India and abroad)
and up to ₹7.5 lakh for other recognized institutes under schemes like Baroda Gyan and Baroda
Scholar.
Which courses are eligible for an unsecured education loan from Bank of
Baroda?
Eligible courses include graduate, postgraduate, professional (engineering, medical, law,
management), and skill-based programs in India and abroad. For abroad studies, courses like MBA, MS,
MCA, and programs by CIMA (London) or CPA (USA) are covered.
What is the interest rate for Bank of Baroda's unsecured education loans?
Domestic studies: 11.40%–13.05% p.a. under Baroda Gyan
Abroad studies: 11.05%–11.15% p.a. under Baroda Scholar
(Female students receive a 0.50% rate concession)
Abroad studies: 11.05%–11.15% p.a. under Baroda Scholar
(Female students receive a 0.50% rate concession)
Is a co-applicant mandatory for an unsecured education loan?
Yes, a parent or guardian must be a co-applicant with stable income (CIBIL 700+ preferred). However,
for premier institutions under the Digital Education Loan scheme, this requirement may be waived.
Does Bank of Baroda provide a moratorium period for repayment?
Yes, a moratorium of course duration + 12 months (or 6 months after securing employment) is provided
before EMI repayment begins.
What expenses are covered under the loan?
The loan covers tuition fees, hostel charges, books, equipment, travel (for abroad studies), and
insurance premiums (for loans above ₹7.5 lakh). Miscellaneous expenses are capped at 20% of the loan
amount.
How long does loan approval take?
Online applications (via Vidya Lakshmi or GyanDhan): 15–20 days
Branch applications: 30–45 days
Digital Education Loan applications may be faster with paperless processing.
Branch applications: 30–45 days
Digital Education Loan applications may be faster with paperless processing.
Can I get a loan for part-time or online courses?
Executive Development Programs (EDPs) via platforms like Times Pro or Hughes Global Education may be
eligible, but standard part-time/online courses typically don't qualify for unsecured loans.
What happens if I don't get a job after completing my course?
The bank may extend the moratorium period case-by-case, but interest continues to accrue.
Co-applicants are responsible for repayment if the student remains unemployed.
Are there any prepayment penalties?
No, Bank of Baroda allows foreclosure without penalties after the moratorium period ends, helping
borrowers save on interest.
List of Unsecured Education Loans by Bank of Baroda
- Bank of Baroda Gyan
- Bank of Baroda Scholar
- Bank of Baroda Digital Education Loan
- Bank of Baroda Vidya
- Bank of Baroda Skill Loan Scheme
- Bank of Baroda Education Loan for Executive Development Programs (EDPs)
- Bank of Baroda Education Loan for Medical and Aviation Courses
- Bank of Baroda Education Loan for Diploma Courses
- Bank of Baroda Education Loan for Teacher Training and Nursing
- Bank of Baroda Education Loan for Study Tours and Exchange Programs