Bank loans for higher studies

Abir has always been a very bright student. Ever since primary school, he has been making his parents proud. But when the time for enrollment to universities came, he found his father, a clerk by profession, in despair regarding the expenses.

Not only for Abir, but higher education can be quite expensive in our country for many students and it gets more expensive if someone wants a degree from abroad.

But that cannot be a hindrance of a student's education. The modern banking system has some solution for this. Students nowadays can apply for loans from banks – popularly known as student loans – to continue their studies.

Various banks offer student loans in Bangladesh. Among private banks, students can avail loans from Mercantile Bank, Eastern Bank, One Bank, Dhaka Bank, NCC Bank etc. Among government banks, Agrani Bank provides loan for students.

Where the educational institutions in our country are suffering from inadequate budget, corruption in teacher recruitment, question paper leak, and above all poor standard of learning, a common tendency among university students is to secure admission to a reputed university in a developed country to get a graduate or postgraduate degree.

Most of the industries developed in Bangladesh are based on cheap labour which fails to ensure a good career to a large population studying at the higher education level.

In this situation, the dream of building a career abroad after completing post-graduation in a developed country in the West, or in a famous university in China, South Korea or Japan, is very common among the youth of our country today.

The children of well-off families are taking this path fairly easily. But for those whose dreams are at risk due to financial strains, this article is for them.

A number of private banks in the country provide education loans for higher studies in local and foreign universities.

Mercantile Bank Ltd is providing an education loan of maximum Tk5 lakh for studies in Bangladesh and maximum Tk20 lakh for studies abroad. 

The loan is available for a minimum one year and maximum of six years with three months moratorium depending on the nature of courses.

Any student between 18 to 26 with excellent results in SSC/HSC/O-level/A-level or equivalent examination from any recognised educational institution at home or abroad can apply for the loan. One can explore details visiting this link: http://www.mblbd.com/home/education_loan

Eastern Bank Ltd is providing three schemes of loan facilities for educational purposes. These are education loans without a security deposit, education loan with a security deposit and credit facility against a security deposit.

Of them, one can borrow Tk1 lakh to Tk20 lakh under the first scheme and the rest provide Tk1 lakh to Tk25 lakh or 90 percent of the security deposit.

The repayment period is 12 to 60 months with a competitive interest rate, according to the official website of the bank. The processing fee for this type of loan is one percent of the loan amount. For detail: https://ebl.com.bd/student-banking/Education-Finance-Pack#

NCC Bank or the National Credit and Commerce Bank Limited also provide education loans amounting Tk1 lakh to Tk10 lakh. Details can be found here: https://www.nccbank.com.bd/index.php/nccbsme_educationloan

Uttara Bank also has an education loan scheme with maximum Tk3 lakh. People aged between 25 years and 60 years can avail the loan against fixed income sources of their own, or their guardians. 

IFIC Bank offers loans for students under its loan scheme 'Parua' that provide maximum Tk8 lakh to be repayable in 12 to 48 monthly instalments.

Brac Bank has also introduced some student loan products that can be availed by the parents or financial guarantors of the students pursuing higher education, locally or abroad.

However, to get this loan, the monthly income of the parent must be at least Tk25,000 and the bank will lend an amount that is 15 times of the parent's gross monthly income. The loan is repayable in small monthly instalments.

Among the nine public banks both commercial and specialised, Agrani has loan facilities for students seeking higher studies abroad. This bank gives loans up to Tk5 lakh with an interest of nine percent and the loan has to be repaid in a maximum 60 instalments.

Foreign banks- Standard Chartered Bank and HSBC also have loan facilities for students.

As education is the most effective weapon against inequality in society, many people from lower economic backgrounds in society are being able to rise up in important sectors of the country by obtaining higher education.

The country's banking sector could play a more significant role in this regard. Banks should start considering loans without any collateral, and be based only the merit of a student.