kumar (11) 18 January 2012

Educational loan

Hello

This is kumar from Bangalore . I had availed a educational Loan of 3 lakhs from the corporation bank . i completed my engineering in 2010. i was supposed to pay the loan from 2011 sep after 1 year holiday period. Since my salary is not that good to fulfill the monthly premium . i requested the bank officials to cut down my EMI. Will there be any legal problem because as per the revised EMI my repayment years will inscrese to 7 years from the 5 years as per the Bank . They also said that only for 1 year u will be allowed to pay the subsidised EMI after that u should be able to pay the EMI as per the bank. If I am not able to pay the EMI specified by the Bank after ! year can they be able to take any legal Action.my bank EMI is 9500 now and subsidised EMI for 1 year is 6000 so next year my EMI will be some where around 11k. I want to continue my subsidised EMI untill i get a good Salary .

Kindly Reply

Regards

Kumar

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5 Replies

ajay sethi (lawyer) 18 January 2012

since they have accepted your request for subsidised EMI continue to pay it on time . after next year again request bank to continue with same EMI as your salary is only sufficent to pay Rs 6000 after meeting your expenses . bank will acede to your request if they want you to pay your EMI

Kumar Doab (FIN) 18 January 2012

Kindly look into the attchment.

As per IBA based on RBI circular;

"The loan to be repaid in 5-7 years after commencement of repayment"

RATE OF INTEREST :

Upto Rs 4 lacs	BPLR
Above Rs. 4 lacs	BPLR + 1%

· Simple interest to be charged during the Repayment holiday/ Moratorium period.

· Penal interest to be charged as applicable to individual banks.
The term of your loan has been increased to 7 years.

Learned mr. Sethi has given valuable advice. Kindly follow it.

You shall have to bear the burden of high EMI in later years.

Obtain the certified copy of loan application and loan agreement from the bank and keep it safely.

To increase your income and savings you may take up some income generating steps e.g. tutions..

Attached File : 769261168 rbi iba guidelines on education loan.doc downloaded: 106 times

VENGETRAO K (Practicing Company Secretary) 22 January 2012

My advice to the students community:

1.Dont get educational loan from bank or NBFC.It will make you a defaulter with high interest rate with monthly or quaterly or half yearly rest . It is not a simple interest.The burden upon you is heavy even before your employment. The educational loan from nationalised bank is not available on concessional rate,say 4% or 6% p.a.under any Govt policy,pl note.Poor students are made more poorer.

2. Instead,try to obtain the loan from private party at 12% to 18% p.a (simple interest).Here the burden is less.

RAJU O.F., (Advocate) 22 January 2012

Students become prey to the educational institutions, when they pay large amounts, by taking education loans from banks. Educational institutions only benefit out of such loans. Most of the education loans granted by the banks are defaulted. Only a very few can earn sufficient salaries in the begining, to repay the loans and hence the borrower students and their parents/family suffer a lot. Banks may not help to reschedule or write-off such loans unless the Govt. grant some subsidy.