Union Bank of India — Education Loans (India)

1. Loan Schemes & Highlights

• PM Vidyalaxmi (QHEI Scheme): Collateral-free and guarantor-free loans for students admitted to the list of 860 quality higher education institutions.

  • Max Loan Amount: No ceiling

  • Interest Subsidy:

    • 100% interest subsidy for family income ≤ ₹4.5 lakh
    • 3% subsidy for family income between ₹4.5–8 lakh
  • Delivered digitally via the Vidyalaxmi portal

• Union Digital Education Loan (Premier Institutes within India):

  • Max Loan Amount: Up to ₹40 lakh
  • Processing Fee: Nil
  • Prepayment & Takeover: No penalties
  • Available 100% collateral-free with digital execution via website or the VYOM app
  • Includes coverage for tuition, living expenses, equipment, laptops, insurance, exchange programs, and even two-wheeler (up to ₹2 lakh)

2. Interest Rates, Margins & Concessions

General Education Loan (MCLR-based):

• Up to ₹7.5 lakh: ~MCLR + 2.20% (~10.95%)
• Above ₹7.5 lakh: ~MCLR + 2.15% (~10.90%)
• For female students: 0.50% rate concession
• During moratorium: Additional 1.00% discount if interest is serviced regularly

United Superb Education Loan (Premier Institutes):

• List A (Top institutes): MCLR + 0.05% (~8.85%)
• List B: MCLR + 0.55% (~9.35%)
• No concessions for interest service during moratorium
• Repayment Tenure: 10 years after moratorium period (course + 1 year or 6 months)—no separate concession details

Special ISB-focused Scheme:

• No collateral or guarantor required.
• Repayment Tenure: Up to 15 years
• Loan includes term-life insurance mandatory in the student's name and added to the loan amount

3. Margin & Collateral

• General Education Loans:

  • ₹4 lakh or less: No margin
  • Above ₹4 lakh (India): 5% margin
  • Abroad: 15% margin

• Premier Abroad Schemes:

  • ₹7.5 lakh to ₹40 lakh: 15% margin required
  • Above ₹40 lakh: Margin waived if collateral covers 100% of the loan, with a ₹10,000 processing fee

4. Fees, Processing & Repayment Terms

• Processing Fee: Nil for most domestic schemes (excluding certain premium and abroad variants)

• Disbursement: Direct to the institution; repayment via SI/e-NACH, VYOM app, or BBPS

• Repayment Tenure: Generally up to 10–15 years depending on scheme, with a 1-year moratorium

• Late EMI Fee: 24% p.a. on outstanding + ₹500 per bounced cheque

• Interest during Moratorium: Chargeable as simple interest, then shifts to compounded on reducing balance

• Term extensions: Possible, subject to bank discretion (up to 2 years)

5. Summary Table

Final Thoughts

Union Bank of India offers strong public-sector options, particularly for merit-based students via Vidyalaxmi or Digital Premier schemes. Unsecured loans up to ₹40 lakh at sub-9% rates are real advantages for eligible applicants. Just ensure your institution is on their banker-approved list and firm up collateral or margin terms early.