Affordable student loans, repayment period to extend
If you were a student seeking bank loan for higher education, you were required to repay the amount within a period of seven years. But that’s changing now. Students would be relieved to know that the repayment period for them would now be extended to 10 years. However, in some cases it might be stretched to 15 years depending on the size of the loan.
Besides assessing a student’s repayment capacity and determining the interest rates, the finance ministry has also directed banks to make credit for students affordable with easier terms and conditions. Not only this, but the government has also asked the banks to implement other measures like:
- Granting short-term loans to students ranging from Rs 20,000 to Rs 150,000 for vocational courses
- Ensuring that all loan applications from students must be considered; bank officials could even be penalized for not honoring cases.
- Increasing penetration of education loans especially in the northeast and Union territories
However, students need to be alert on the repayment front as Credit Information Bureau (India) Ltd (CIBIL) tracks credit history and assesses credit worthiness for borrowers. Any default towards repayment of education loan might negatively impact a student’s credit history and score, and thereby affect the chances of getting another loan in future.Read more.
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