Study loan schemes of PCBs now attractive among students
Mahmuda Shaolin | Monday, 30 June 2008
Study loan schemes are increasingly becoming an attractive product for private commercial banks (PCBs), which are expanding their business portfolios to meet the demand of the growing number of students in private and public educational institutions.
But some students found the interest rate on such loans quite high for general students and urged the banks to lower it for facilitating them.
Currently the interest rates on educational loans vary between 14 per cent and 18 per cent.
"Student Loan Scheme for higher education of PCBs is a form of financial aid for study purpose that must be repaid later with interest," said Md. Kamruzzaman, vice president, head of Retail and SME division of Dutch-Bangla Bank Limited (DBBL).
Student loan facility will continue to expand because guardians are facing difficulties in bearing the expensive private educational cost for their children, he said.
The advantages of educational loans include easy application processing, no application fees, competitive interest rates, funding in five working days, he added.
The DBBL offers 'Education Line', a term loan facility for education for any individual salaried executive, professional or a business, which has been started from September 2007.
The bank started the service from last year in all of its branches to meet the educational expenses, tuition fees, purchase of computers and other equipment and accessories for any student.
A private service holder earning at least Tk 10,000 (gross monthly income) will be able to apply for such a loan of DBBL. A businessman or a self-employed individual having monthly average income of Tk 30,000 will be eligible for such loan.
Under the scheme, there will be a credit facility of maximum Tk 1.0 million or 12 times of the applicants' gross monthly income, whichever is lower with 14 to 17.50 per cent rate of interest.
The loans are repayable in installments ranging from 12 months to 60 months.
"BRAC Bank Limited, one of the leading PCBs, is providing 'Study Loan' for parents, guardians or financial guarantors of the students studying at home and abroad", said Abedur Rahman Sikder, vice president and head of marketing and corporate affairs of the bank.
The bank has already disbursed Tk 310 million as student loan, he told the FE.
The bank launched the loan service in 2005. It has set up a separate branch 'BRAC Bank Student Loan Service Centre' in the city's Banani for counseling and disbursing student loans.
Under the scheme, they are providing loans at an interest rate of 14 per cent, which will be repayable in 12, 24, 36 and 48 months.
AB Bank Limited, another PCB, offers education loan for students of reputed educational institutes, parents in service and businessmen for admission or education fees, semester fees, and studying abroad, an official of the bank, Mahfuzul Haque said.
AB Bank has recently signed corporate agreements with a number of public and private universities, he said adding that the bank has launched the product in 2005 and has so far provided loans to 2000 students, which will touch around 5000 very shortly.
Under the scheme, AB Bank is providing loans ranging from Tk 50,000 to Tk 0.3 million and it takes Tk 500 as application fee. In addition, the processing fee is 1.0 per cent on the approved loan or Tk 1000 whichever is higher. The interest rates varies between 14.50 and 16.00 per cent. The loan is repayable between 12 months to 36 months.
Eastern Bank Ltd (EBL) has taken a comprehensive package to finance the needy students in completing their higher education both at home and abroad.
Under the package, the EBL has already launched the 'education finance pack' on January 22, 2008.
"Every year, some 35,000 students apply for higher studies in foreign universities. We provide necessary financial support to help them to successfully complete their education, a cornerstone of better career," said an official of the bank.
He said the loan schemes-Eduloan Secured, Eduloan Unsecured and Eduline - have been developed to improve the quality of human resources in the country as many students face financial crisis to continue higher studies both home and abroad.
Any employee, businessman, self-employed individual is eligible to avail these loans with 18 per cent interest rate.
The Eduloan Secured is available against a security deposit and that is repayable in 12 to 60 monthly installments.
The Eduloan Unsecured is available without any security deposit and the maximum amount will be Tk 1.0 million or 10 times of gross monthly income of the applicant.
"If financing students under loan scheme is adopted as a policy instrument, far reaching positive changes will take place in the higher education field. Such a policy will gradually tackle problems of session jam, academic mismanagement, indiscipline and groupings in academic institutions," said Prof. Mahbubul Mokaddes, an economist of Dhaka University.
He expressed the hope that the establishment of an Educational Bank can go a long way in developing sustainable professional education in the country.
Students and guardians term the education loan a helpful one but urged the banks to lower interest on such loans.
"I have got the education loan for my higher study. I feel proud when I heard that our country's banks are disbursing such kind of loan to help the students. I have applied for the loan to complete my job related certificate course," said Md. Ekram Uddin, senior executive of ACE IT Networks Ltd. of AMRA Group.
"Our company has a corporate deal with Dutch Bangla Bank Limited (DBBL) so I got the loan on 14 per cent interest. It is a good initiative of banks and it also gives clients more confidence and comport to get higher study," he said.
The student loan facilities are very good idea for the country but I think, the rate of interest is very high, said Md. Khaliquzzaman, a government official.
But some students found the interest rate on such loans quite high for general students and urged the banks to lower it for facilitating them.
Currently the interest rates on educational loans vary between 14 per cent and 18 per cent.
"Student Loan Scheme for higher education of PCBs is a form of financial aid for study purpose that must be repaid later with interest," said Md. Kamruzzaman, vice president, head of Retail and SME division of Dutch-Bangla Bank Limited (DBBL).
Student loan facility will continue to expand because guardians are facing difficulties in bearing the expensive private educational cost for their children, he said.
The advantages of educational loans include easy application processing, no application fees, competitive interest rates, funding in five working days, he added.
The DBBL offers 'Education Line', a term loan facility for education for any individual salaried executive, professional or a business, which has been started from September 2007.
The bank started the service from last year in all of its branches to meet the educational expenses, tuition fees, purchase of computers and other equipment and accessories for any student.
A private service holder earning at least Tk 10,000 (gross monthly income) will be able to apply for such a loan of DBBL. A businessman or a self-employed individual having monthly average income of Tk 30,000 will be eligible for such loan.
Under the scheme, there will be a credit facility of maximum Tk 1.0 million or 12 times of the applicants' gross monthly income, whichever is lower with 14 to 17.50 per cent rate of interest.
The loans are repayable in installments ranging from 12 months to 60 months.
"BRAC Bank Limited, one of the leading PCBs, is providing 'Study Loan' for parents, guardians or financial guarantors of the students studying at home and abroad", said Abedur Rahman Sikder, vice president and head of marketing and corporate affairs of the bank.
The bank has already disbursed Tk 310 million as student loan, he told the FE.
The bank launched the loan service in 2005. It has set up a separate branch 'BRAC Bank Student Loan Service Centre' in the city's Banani for counseling and disbursing student loans.
Under the scheme, they are providing loans at an interest rate of 14 per cent, which will be repayable in 12, 24, 36 and 48 months.
AB Bank Limited, another PCB, offers education loan for students of reputed educational institutes, parents in service and businessmen for admission or education fees, semester fees, and studying abroad, an official of the bank, Mahfuzul Haque said.
AB Bank has recently signed corporate agreements with a number of public and private universities, he said adding that the bank has launched the product in 2005 and has so far provided loans to 2000 students, which will touch around 5000 very shortly.
Under the scheme, AB Bank is providing loans ranging from Tk 50,000 to Tk 0.3 million and it takes Tk 500 as application fee. In addition, the processing fee is 1.0 per cent on the approved loan or Tk 1000 whichever is higher. The interest rates varies between 14.50 and 16.00 per cent. The loan is repayable between 12 months to 36 months.
Eastern Bank Ltd (EBL) has taken a comprehensive package to finance the needy students in completing their higher education both at home and abroad.
Under the package, the EBL has already launched the 'education finance pack' on January 22, 2008.
"Every year, some 35,000 students apply for higher studies in foreign universities. We provide necessary financial support to help them to successfully complete their education, a cornerstone of better career," said an official of the bank.
He said the loan schemes-Eduloan Secured, Eduloan Unsecured and Eduline - have been developed to improve the quality of human resources in the country as many students face financial crisis to continue higher studies both home and abroad.
Any employee, businessman, self-employed individual is eligible to avail these loans with 18 per cent interest rate.
The Eduloan Secured is available against a security deposit and that is repayable in 12 to 60 monthly installments.
The Eduloan Unsecured is available without any security deposit and the maximum amount will be Tk 1.0 million or 10 times of gross monthly income of the applicant.
"If financing students under loan scheme is adopted as a policy instrument, far reaching positive changes will take place in the higher education field. Such a policy will gradually tackle problems of session jam, academic mismanagement, indiscipline and groupings in academic institutions," said Prof. Mahbubul Mokaddes, an economist of Dhaka University.
He expressed the hope that the establishment of an Educational Bank can go a long way in developing sustainable professional education in the country.
Students and guardians term the education loan a helpful one but urged the banks to lower interest on such loans.
"I have got the education loan for my higher study. I feel proud when I heard that our country's banks are disbursing such kind of loan to help the students. I have applied for the loan to complete my job related certificate course," said Md. Ekram Uddin, senior executive of ACE IT Networks Ltd. of AMRA Group.
"Our company has a corporate deal with Dutch Bangla Bank Limited (DBBL) so I got the loan on 14 per cent interest. It is a good initiative of banks and it also gives clients more confidence and comport to get higher study," he said.
The student loan facilities are very good idea for the country but I think, the rate of interest is very high, said Md. Khaliquzzaman, a government official.