Banks announce caution over education loans as demand remains strong

12 August 2013 - Which Way To Pay

Email Article Print Article

Banks issue formal caution over education loans applications

The Lead Bank has issued a formal warning to all the banks after many deficiencies in the processing of education loan applications came to light.

Increase in default on education loans

A year after the finance minister urged banks not to turn down education loan applications from deserving candidates, lenders remain sceptical about the business. "In certain cases, the students who avail loans then disappear from the radar of the bank, making it difficult for us to track them and get repayments," said a senior official at a public sector bank. In addition, there has been an increase in the probability of defaults on these loans due to the weakening economic scenario and decrease of graduate jobs. Banks have stuck to lending to students who go for courses like management and medicine.

Government announce an education credit guarantee fund

"The government had earlier said that it will be coming out with an education credit guarantee fund but we are still waiting for the announcement. It's not that we will lend with only such a fund, but it gives us a little more comfort," said a banker.

Demand for education loans remains strong

Currently, banks give out education loans at interest rates between 11.5% and 13% depending on the specific course chosen by the student. The demand for education loans remains very strong as many middle-class Indian students want to go into higher studies in India and also abroad.



Compare Foreign Exchange and Currency >>

Compare Loan and Debt Products >>

Compare Cards Products >>

Compare Money Products >>

Compare Insurance Products >>

When the planning starts for that special day in everyone's lives , There is always the worry and stress of how much strain it is going to put on your financial situation . Marriage loans are helping lots of people to ease this stress.
08 August 2015
Which Way To Pay
Marriage loans have been introduced to help prepare for the expense you will incur when celebration the most special day of everyone's life.
As everyone wants that big day to be perfect , there is also a hefty cost that comes with it .
14 May 2015
Which Way To Pay
Marriage isn't a cheap affair that's why Marriage loans have proven so popular across India.
Everyone want the best education , But financially this can be a worry
07 October 2014
Which Way To Pay
Getting the best education is the main priority in most people's lifetime.