Education Loans from Banks | Some challenges to students
Getting Education Loans from banks is not that easy now. As the bad loans in education loans category increasing, banks have become cautious on sanctioning fresh loans to the sector. Though, there was an implied obligation on public sector banks to disburse the education loans as per the targets, banks facing lot of delinquency pressure due to growing defaulters in this segment. This situation is leading in to trouble for many financially backward meritorious students, who were aspiring higher education by getting student loans from banks.
As every body knows, merit students can avail education loans from banks up to four lakh rupees without any collateral security for domestic institutions. Primarily the student’s loans from banks will be for paying tuition fee only. Other expenses like books, hostel fee are not covered under education loan. For overseas education, the rules are slightly different, which we can discuss separately. As the engineering and other professional colleges admission are over, many students are looking for financial aid. Education loans from banks are the best option for right candidate. But as said earlier, the big challenge is to convince the bank manager to accept your loan application. Basically, loans are depends on the manager-customer relationship rather than talking about rulebook. If you want to get an education loan from any bank, first you check your relation ship how best is with your bank manager.
Relationship plays a key role. Because, the branch manager of the particular bank that you have approached for education loan is the key person to sanction or reject any loan. Once, branch manager convinced, your half of the work is done. The remaining part is documentation. Before planning to approach the branch manager, you must know the list of the required documents to submit to add value to your education loan application. If you are able to submit all the required documents, 80% of the job is over. Remaining part is just a formality. However, first half is not that easy. Branch manager always plays a safe game and no body prefers to get in to bad loan category. So, Bank Manager will see your financial background, though it was not mandatory as per rule. It is always better to give a sense about your future earnings, current assets base to the bank, so that they can treat your application with credibility.
If you have a potential credit history with the bank, don’t hesitate to showcase it. It will add more value to the application. Manager feel safe to sanction loan. Normally, assets like own house, farm lands, plots will be kept as un registered collateral security to get sanction for education loan from banks. In case of employers, their future earnings will be the basis for loan. Despite many flexibilities in laws and norms, banks always prefers to avoid education loans fearing defaults. The success to get the loan purely depends on how best you can convince the manager for loan. Rest is easy. Best of luck.
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