Union Education Loan


Union Education Loan is provided to help poor and needy for basic educations and to meritorious students for their higher studies. A person should be an Indian national and has secured admission through an appropriate selection process. Courses covered in India are- Graduation, Post Graduation, Diploma courses, Technical Courses, Professional Courses, Management and PhD courses. While courses covered outside India are- Graduation, Post Graduation, Certified degree courses conducted by CIMA, London, CPA, USA and other such institutes, PhD courses.

Student can also approach bank for loan in their subsequent years of course. Provided student has not availed loan for initial years from any other bank or financial institutions.



Type of studies

Maximum Quantum

For Inland Studies

Rs. 20 lakhs

For Studies Abroad

Rs. 30 lakhs


Quantum of loan Margin
Up to ` 4 Lakh Nil
Above ` 4 Lakh Studies in India 5%
Studies abroad 15%


Here the word “Inland” means in India and the word “margin” means the amount of money student have to bear. Suppose student A has applied for loan of Rs. 20 Lakhs for medical studies in India. Then loan will be sanctioned for Rs. 19.2 Lakhs and the rest Rs. 80,000 will be treated as margin money.


Union Education Loan Rate of Interest:

                                                COVERED UNDER CGFSEL
Quantum of Loan      Effective Rate of Interest
Male Female
Up to Rs. 7.50 Lakh 10.10% 10.10%



                                           NOT COVERED UNDER CGFSEL
Quantum of Loan    Effective Rate of Interest
Male Female
Up to Rs. 4.00 Lakh 11.25% 10.75%
Above Rs. 4 lakh and Up to Rs. 7.50 Lakhs 11% 10.50%
Above Rs. 7.50 Lakhs 10.10% 9.60%


Security Requirement:

  • Up to Rs. 4 Lakhs- No security is required
  • Above Rs. 4 Lakhs and Up to Rs. 7.50 Lakhs- If there is any deviation then third party guarantee with equivalent means should be taken
  • Above Rs. 7.50 Lakhs- Tangible collateral security of minimum value equivalent to the loan amount and interest accumulation during course & moratorium period, acceptable to the bank.


The term “deviation” here means when bank deviate from terms and conditions to grant the loan when customer is not able to comply the set terms and conditions of loan. Various documents are required to check the creditworthiness of loan seeker. When all these are in order then they are eligible for loan. However, if there are any small shortcomings not large enough to be rejected, such situation is called deviation.


CGFSEL- Credit Guarantee Fund Scheme for Education Loan has been launched by Ministry of HRD, Government of India to provide interest subsidy on education loan. Students belongs to economically weaker sections of the society with an annual gross family income not exceeding Rs. 4.50 Lakhs can avail this facility. The said subsidy is for the course and moratorium period only.


For more information on Union Bank Education Loan and special offers, kindly visit here


Kindly check also Union bank offers on home loan and Vehicle loan


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