Education and Career Forum

Hello, If I get an Education Loan from Union Bank of India and also applied any scholarship during my course then the scholarship is also include in margin? I have read about the norm but unable to understand. Kindly tell me what is this? And why it is necessary?

No, it is not necessary that if you get a scholarship it will be included in the margin of your education loan scheme. For any amount of education loan you opt, there will be a definite margin as percentage of entire loan which will be security margin deposit. So whenever there is loan disbursement, the bank will ask you to deposit that percentage amount in your account. For example, if you take loan of 7.5 lakhs, the margin will be 15%. Hence in first installment if bank gives loan of 1 lakh, it will ask you to deposit 15K in your account and as a consequence will give 85K as loan and 15K from your account for the disbursement amount of 1 lakh. Thus, usually the bank states that if the student gets a scholarship, then it can be directly linked to this margin deposit and the amount from scholarship can be used as security margin deposit to some extent if not entirely. Security margin deposit is a mandatory clause of education loan scheme.