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Jagan (Free)     24 October 2014

Urgently need information on education loan settlement

Hi, I have taken education loan of 2 lakhs from bank for the period 2008 - 2012. I didn't start the repayment as i didn't get any job. My loan went in NPA- Non profitable assets as per bank policies.

The bank forces me to take OTS - one time settlement of 2.5 lakhs (Total out standing 3 lakhs)

My friend who have the same situation told the bank that they are not going to pay.. He is telling me that bank will write off the education loan after some time, so he is not going to pay.
I am in dilemma for whether to pay (borrowing from private lenders) or do like him.

My questions are,
1. if i don't repay the loan what will happen?
2. My friend told that he didn't give his PAN card details and their family moved to some other town totally., so bank people cant go and ask in his current plan. Is this true? can he escape from repaying education loan?
3. What is the actual procedure of recovering education loan when we don't provide any security?
4. I asked for some more time as holiday period as i can pay after some time when i get a job, but the are demanding OTS asap. what can i do in this situation?
5. y financial situation is too bad, what should i do in this?


 8 Replies

V M DAHAKE (PROPRIETOR)     25 October 2014

Dear Student,

 Education loan upto Rs. 2.0 lakh is given as unsecured loan. So it can not be enforced against your any specific asset. Otherwise also as you said you have no means / assets from where bank can recover it. There is not much bank can do in such a situation. If there is any co-borrower or guarantor, bank can proceed against him even if it prefers not to proceed against you.

It is not advisable to pay by borrowing from private lenders who will be charging you a very high rate of interest and there will be other obligations. It is not also advisable to think about defaulting on educational loan.

 Please convince bank officials about your financial position and give proper repayment solution.

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     25 October 2014

First and foremost, do not listen to your friend who appears to be a wilful defaulter and wishes to dupe the bank. An institution which had helped in time of need should be treated with some respect it deserves.


Your Educational Loan must have been given jointly with your parent ie. Father or Mother.  Therefore, all the details of yourself, your family must be with the Bank. Of course, only if you have provided correct details. 


Even when your loan per-se was given as unsecured loan, Bank if they decide can proceed against your and your family's movable and immovable assets. Therefore, do not be under some impression that bank cannot do anything.


Therefore, approach the Bank Officials with your Parent and discuss the issue thoroughly and try to pay the dues as early as possible.  Please remember unless existing borrowers repay, bank shall not be able to give loans to other students in need of loan.

1 Like

T. Kalaiselvan, Advocate (Advocate)     27 October 2014

While I fully agree to the views and opinions/suggestions made by Mr. Sivaramaprasad, I would like to inform that you do not raise queries here to cheat and escape the loan liabilities fraudulently.  This forum is not for advising wrong things or will guide anyone with illegal ways to defraud anyone including the bank.  Better ignore your friend's misguiding attitude and try to resolve your own issue by following the proper and legal steps to come out of the crisis. Do not ever have any intention to cheat the bank anytime.

1 Like

mohan   11 July 2015

I have repaid my education loan with sbi under NPA Status. But it is still showing as WRITTEN-OFF in my CIBIL Report. I currently have two more house building loans which i am paying properly and has no issues with them and filing ITR properly with an income as shown Rs 311000/-. But as my CIBIL score is 560 i failed to get a credit card. My questions are :

1. How can i solve my WRITTEN-OFF status to "Closed with Nil Dues" with SBI?

2. How can i get a minimum balance credit card against a fixed deposit?

I deal in IT Services business so i need to buy online regularly and my debit cards are not supported by all online purchase mediums, they need a credit card. So, how can I convince my banker "bank of india" and "icici bank" to give me a credit card against a fixed deposit?

3. Should i approach ombudsman for a solution with SBI as i have repaid their loan under a settlement as suggested by them which may now hurt my cibil score. Can SBI still do anything so my loan status comes as closed with no dues, if so what are they and what i need to do?

lipunbaba   23 August 2015

Hi Experts,

If OTS is done how it will affect the cibil score.For ex-i have taken study loan(below 2l ac) from SBI and if OTS is done is there any chance that in future i wont be able to take any loan from SBI or any other banks also?

At the time of availing the loan,pan card was not there.Now i am hearing that they are collecting cibil data from database.Is there any solution for this. Experts please suggest.

Goutham   21 May 2017

Bank forcing me to one time settlement. I availed around 2 lakhs(2007 - 2012 (inclusive of two loans)) but with all interestbank forcing now the loan amount is 3.5 lak... bank manager asked me to pay OTS of some amount.

Manager said after paying OTS it will reflect in cibil upto two years... after two years it will not reflect in cibil.. is this true?? 

can I go for OTS. awaiting for your advise.


Rylee Travis   25 May 2018

Banks are allow to get money as a loans for the education who are actually serious with study. The conditions of return the money will be from best custom essay writing services that support the study for the intelligent.

Vignesh kumar   26 April 2019

Hi, i am vignesh.i have educational loan in karur vaysa bank.its a joint account for me and my sister.but, 2 months before i have fully paid my all educational loans.but, the bank still now not relaesing my house document.wt to do? Can i register a legal complaint against bank?

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