State Bank of India provides term loan scheme "School Plus" for existing schools in order to repair / renovate / add new buildings or purchase of electronics equipment, computers and laboratory equipment, books, manuals, furniture and other utility fixtures.
Eligibility for SBI School Plus Bank Loan
1. Educational institutions with adequate source of income
2. Educational institutions run by trusts, private management
3. Institutions should have necessary approval from the Government agencies to run the school
4. Building construction / alteration / renovation should have a proper approval from local bodies
5. The promoters / Trustees / key persons of the school should be persons of good standing in the society.
Nature of Facility for SBI School Plus Bank Loan
Term loan with fixed repayment schedule based on repayment capacity and income streams
Margin: 15% of the project cost
Tenure of School Plus Bank Loan
1. Loan amount up to Rs. 2 lakhs - Repayable in 36 equated monthly installments
2. Loan amount from 2 lakhs to 5 lakhs – Repayable in 60 equated monthly installments
3. Loan amount above 5 lakhs – Repayable in 84 monthly installments
Security of SBI School Plus Bank loan scheme
Primary security: Hypothecation of the charge over assets acquired out of bank finance.
1. Personal guarantee of the Key Manager/Trustees/Promoters/any other persons/body acceptable to the bank
2. Equitable Mortgage of the land and building of the school or of the guarantor (depending on the availability)
3. For loans over 2 lakhs equitable mortgage over the other immovable assets of the institution (depending on the availability)
Frequently Asked Questions (FAQ) About SBI School Plus Bank Loan Scheme
FAQ-1. A registered society started constructing a school building and want to know whether they are eligible for SBI School Plus Bank Loan.
Answer: Eligibility for SBI School Plus Bank Loan depends many factors including loan amount, valuation of the property, and clarity of other documentation. Registered society that runs school usually gets loan from SBI. You can have a meeting with your nearest bank branch for exact details. Contact nearest branch and have a discussion with branch manager for detailed information.
FAQ-2. An ITI (Industrial Training Institute) is being functioned since 2010 and also open Current account in SBI bank in 2008 which is currently active. When approached to Bank Manager for Construction of Loan and submitted the proposal one year back, Manager asked to contact concerned authority for NOC and Security. Please clarify how can the concerned authority give us NOC, please suggest.
Answer: Bank Manager may meant that Institute should get NOC from the affiliated Educational / Training Directorate in order to get functional authenticity of the institute.
FAQ-3. I have my own big house, now registered as a trust and willing to modify / reconstruct the house to school by donating the house / land to trust. Shall we get loan to construct school / coaching classes for poor?
Answer: If you have completed registration process of trust and the same trust has its own property, bank will give loan for building schools, provided, property to be the primary guarantee.
FAQ-4. What is the procedure for obtaining SBI School Plus Bank loan for renovating an existing school?
Answer: First of all, school should get approval / NOC from local authorities that connected your school. All other procedures are same for all cases. If you have other eligibility described in the article, have a meeting with branch manager of SBI near to your institution. They will guide you how to proceed. Better keep away from mediators or agents who offer many things that ultimately helps you to lose your money and time. Talk to only Manager in the office.
FAQ-5. I have my own land in rural area. I approached different banks including SBI to get loan against property but all the managers refused saying that they give loan only if the property is under municipal corporation. Kindly tell me if there is such rule. Kindly suggest how can I get loan?
Answer: No such rule either in Nationalised bank or any other private / scheduled banks. Try to contact another branch and find what they say.