Education loan
Guest
(Querist) 02 January 2014
This query is : Resolved
I am unable to pay my education loan.The bank manager is visiting my home for it.My parents are dependents.How to settle it.What if I fail to pay it?Kindly help in this regard.
malipeddi jaggarao
(Expert) 03 January 2014
For what course you have taken education loan? What is the quantum of loan? Whether there is any third party/collateral security given to obtain the loan? When you have completed the course? Whether you have paid any amount till now or not?
You should come up with the above facts before seeking assistance.
However, I would like to suggest certain points as follows:
1) Normally education loans will be given to a student on grounds of merit in his name and his father's name (making him as co-borrower).
2) Generally the parent would pay the interest during the period of education if they have resources. If they do not have resources, the Bank will charge simple interest during the study period and add-up to the principal after completion of study including gestation period.
3) Gestation period is cooling period normally granted 6 months after completion of study or getting a job whichever is earlier.
4) Once the gestation period is over, the student or his parents are expected to start repaying the EMIs.
5) If the student does not get a job, do not have any source of income and his parents also not in a position to repay the EMIs, the student can seek more time by applying in writing to the Bank stating his financial position and ask the bank to reschedule the repayment period and EMIs.
Education Loan is a service to the society. In all other loans, banks will assess the repayment capacity of the borrower, which is not so with the education loan. Hence after lapse of gestation period, it is for the student to make arrangement to repay the loan and he can not take plea that he has not get a job.
Co-relate your situation to the above points and decide the course of action.
ajay sethi
(Expert) 03 January 2014
if you have taken educational loan and unable to pay ask bank to reschedule loan for repayment .
Rajendra K Goyal
(Expert) 03 January 2014
In case there is any collateral or third party guarantee Bank can initiate recovery proceedings and file suit against them along with you.
Guest
(Expert) 03 January 2014
Now that you are employed as per other queries of yours so what is the problem in returning it atleast slowly
T. Kalaiselvan, Advocate
(Expert) 04 January 2014
You can request the bankers to reschedule your loan repayment and arrange for much more convenient repayment.
Guest
(Querist) 06 January 2014
The Moratorium period for Engg studies-Course duration plus 1 year.If I my loan has been sanctioned in final year,then will the moratorium period be upto four more years after completion of my studies.
I am struggling to repay my loans but the bank officials are unable to clear the doubts pertaining to my loan since I have availed for subsidy,still they are charging interest on the amount during the moratorium period and that too the interest is compounded.Moreover they had done my personal insurance and they are charging compound interest for the same.
According to bank rules the interest is SI for moratorium period which is being payed by my subsidy scheme.So the CI should be charged only after moratorium and that too on the principal.So I have to pay principal and slight interest if the moratorium period has been covered.But the bank officials are unable to explain it and disagreeing without any reason.
Rajendra K Goyal
(Expert) 06 January 2014
Bank has given loan, it is entitled to charge interest from first day it gave loan (even for moratorium period also). Interest is compound and not simple.
You can avail any subsidy if applicable to compensate this charge.
You should start payment otherwise Bank may start recovery proceedings.
malipeddi jaggarao
(Expert) 07 January 2014
Moratorium period is only one year after completion of studies irrespective of date of availing the loan.
Compound interest is not during the gestation period. You can dispute it with the bank.
Bank will take Life policy of the borrowers of education loan to hedge their risk. There is no wrong in taking Life Policy and the premium is also very less such policies.
Interest applicability is not in the hands of Branches nowadays. Interest is applied through software installed. Slightest deviations also the software does not allow. Hence you have to talk to the Branch Manager bringing all these factors before the Bank. But they will listen to you only when you start repaying the loan amount.
There is no reason to say you are unable to repay the loan though you are in financial difficulties. Only the way out is pay the overdue interest and request the bank to reschedule the repayment period. You can bring out the errors in interest application at any time before closure of the loan.
Guest
(Querist) 07 January 2014
Thanks a lot.They say that the account has been shifted from PD to EMI.According to PD did I need to pay to the principal only but now they are asking principal and interest on the pricipal and accrued interest.
Guest
(Querist) 07 January 2014
@Mallipedi Sir.
What will be the moratorium period in case of student completing the course in five years instead of normal four years.(Just for query sake)
Rajendra K Goyal
(Expert) 07 January 2014
Moratorium period would not change till the sanctioning authority agrees to reschedule it.
It is not clear what the PD means, interest is charged for amount used for the no. of days including moratorium period.
malipeddi jaggarao
(Expert) 07 January 2014
Don't ask things for query sake. The course period is as laid down by the institution at the time of admission. If somebody could not complete the course within the time frame, the bank will look into the reasons and decide on the merits on the case if applied by the borrower.
First of all, you start paying the loan. Then your grievances will be positively looked into by the Bank Officials.
Advocate. Arunagiri
(Expert) 07 January 2014
The moratorium period of 1 year will lapse from the date of completion of the course. It is immaterial that he complete the degree or gets job.
The loan repayment has to start either from the 12 th month or from the date of employment, which ever is early.
The bank is having the right to recover the money from the student through court. To avoid this talk to the bank, explain the difficulties, get extension of time for repayment or try to reschedule the loan.
Guest
(Querist) 08 January 2014
Thanks all.
ajay sethi
(Expert) 08 January 2014
thanks for your appreciation
Sudhir Kumar, Advocate
(Expert) 09 November 2014
on other thread you describe yourself as a dismissed govt servant?
