Education and Career Forum

Friends,
I need a Education Loan of Rs. 5.75 Lacs for my MBA but in 1st year I need only Rs. 2.5 Lacs as a Tuition fee. As the Bank sanction the complete tuition fee in one time so will they charge the interest rate for complete Rs. 5.75 Lacs in the first year of my MBA?

No, the bank will not charge interest for the entire loan amount from the beginning. It will charge interest on the loan amount which has been disbursed to you. For example : If you have taken a loan of 5.75 lakhs and you took 2.5 lakhs from bank for the first year of your MBA course, the bank will charge interest on 2.5 lakhs for the first year. Then again in the second year when you take the rest of the amount as loan thereby your loan amount going to 5.75 lakhs the bank will charge interest on 5.75 lakhs from the second year. Interest will be charged only on the amount which has been disbursed to you as loan.

Originally Posted by Unregistered

Friends,
I need a Education Loan of Rs. 5.75 Lacs for my MBA but in 1st year I need only Rs. 2.5 Lacs as a Tuition fee. As the Bank sanction the complete tuition fee in one time so will they charge the interest rate for complete Rs. 5.75 Lacs in the first year of my MBA?

Bank charge the Education Loan as per the tuition fee required by the College. They do not sanction the whole amount at an once. So, while applying for the Loan you have to pay the ledger of the Tuition fee so that the Loan can be sanctioned as per the tuition feel amount. So, if your Tuition fee is paid in 2 installment then the bank will sanction you the amount in 2 installments only.