Education and Career Forum

Hello Friends,
I have applied for an Education Loan from Bank of India. I want to study MBA course and getting in in Hotel Management specialization. But as I have applied an Education Loan, I doesn't understand the pre payment penalty of Education Loan. Will you please tell me what kind of penalty it it?

There is nothing like pre-penalty in education loan scheme. The amount which has been charged as pre- penalty is the security margin which you need to pay at the time of every loan installment disbursement. This is one of the compulsory clause in education loan scheme. For example, if a loan between 4.5-7.5 lakhs is taken, you need to pay 15% as security margin deposit. So if you want loan installment of 1 lakh, then you need to pay 15,000 as security margin deposit and bank will pay rest 85,000.