Education loan defaulter settlement

Suraj Prasad (Querist) 31 May 2015 This query is : Resolved
Hi Sir,

I took UCO bank education loan of Rs 2.20 from 2008 to 12.
During this period I never paid any installment. But I submitted the interest subsidy by govt of india of two times. Interest Amount deducted from my principal. And Rs 20000 in cash comes from LIC which is also give to bank.

Now at present time Total due amount is Rs 3.2 lakh
But I have ready to pay Rs 2.20 lakh at one time. As bank Manger told very roughly to pay 3 Lakh at one time.

I humble request to them to consider Rs 2.2 lakh but they don't agree and told me that this case is settlement in Court..

Kindly suggest me that what I will do. Is there advantage or disadvantages in settlement through court.

I am waiting for ur valuable response.

Follow Query

Report Abuse

Guest (Expert) 31 May 2015
On what ground do you want the court to waive off or reduce your loan dues to bank?

P. Venu (Expert) 31 May 2015
Scope for settlement comes only when the Bank files a recovery suit and the court refers the matter for settlement.

Your query suggests that you are in position to clear the whole liability. Then, why you wish to evade?

Kumar Doab (Expert) 31 May 2015
Settlement is adverse entry in credit history maintained by credit bureau's.

The delinquency would have already been recorded in credit history maintained by credit bureau's.

If you wish to settle then you may preferably involve your able lawyer so that the settlement also leads to cleansing your credit history.

Dr J C Vashista (Expert) 01 June 2015
I agree with experts, nothing more to add.

Rajendra K Goyal (Expert) 01 June 2015
If you are able to pay, clear the outstanding and get the clearance.

Waiving of approximate more than 30% of outstanding in this case is involved and it would require the cooperation and permission of much higher official of the Bank and solid grounds to do so. No manager would gather courage to refer the matter till solid grounds to do so exist.

However, if any OTS (One time settlement) scheme is pronounced by RBI or the Bank you may get the benefit.

malipeddi jaggarao (Expert) 05 June 2015
Education loan is a Central Government Scheme implemented by Banks to meritorious students though they are not in a position to meet the education expenses. You have not paid anything during 4 years. Whatever you have paid is the subsidy and Insurance proceeds. One time settlement depends upon the repayment capacity and the reasons for default. You have not come out whether you are employed or not. I sincerely advise you to pay back the entire dues without claiming any concession. If you really are not in a position to repay, then give an application to the bank asking for OTS and it will be disposed-off basing on the merits.

Guest (Expert) 05 June 2015
You may go as per the advice of Shri Malipeddi Jaggarao, if you are really unable to afford repayment. But one thing is certain, after availing OTS, your CIBIL credit rating would be affected adversely with the result that no bank or financial institution would like to grant you loan of any kind even at the time of your dire need.

So, better try to save your credit rating by your close cooperation in clearing your debt liability seeking necessary help of the bank authorities.