This topic contains
Current scenario of Education loans in India from different banks.
1. Drop-in Education loans businesses due to Covid
The Pandemic had resulted in a drop in the education loan business in the year 2020. The first quarter of the year was swiped down due to lockdown. According to Avanse Financial Services CEO, Amit Gandia, the first quarter of the year saw only 20% of disbursements, as compared to last year. However, the second quarter ending September had some growth and the volume spiked up to 45%.
2. RBI allowed the restructuring of personal loans
Due to pandemic situations, the employee fire rate was at a surge. Reports suggested that people were drawn towards traditional courses such as engineering, medicines, science, etc. In August 2020, the RBI allowed the restructuring of existing Education Loans to help people manage their financial stress due to the pandemic. This includes the rescheduling of payments. Also granting of temporary suspension of loan for maximum up to 2 years after income assessment of the individual was a part of it.
3. Banks may offer loans for studying from home
A few state-owned banks are working on creating new loan products t fund online education. M Aruna, deputy general manager of Indian Bank, said the institution was thinking about how to allow applications if students apply for coursed that are virtual in nature[Times of India]. The primary discussions have begun. The banks could start to lend education loans for online courses done through private educational service providers.
4. Application for Education Loans restructuring Scheme
SBI had launched an online portal to relieve its borrowers amid the COVID-19 crisis. The borrowers can check eligibility criteria and apply for restructuring their loans through that portal.
5. How to apply for SBI restructuring online-
Log in to the restructuring portal
Enter loan account number
Complete verification to know your eligibility
Get the reference number(Valid for 30 days)
Visit a branch to complete all formalities
Document submission and verification
Under this framework, borrowers whose loan accounts were classified as standard and not default to or more than 30 days as of March 1, 2020, are eligible.
6. Introduction to Education Loan EMI Calculator:
EMI calculator answer the following questions-
Monthly payments upon application of loans
Total Cost of loans
Total interest payable
Detailed amortization table breaking down the EMIs into principal and interest amounts on a monthly as well as a yearly basis to get an estimate of the equated monthly installment (EMI), the following details are required-
Other processing fees
Most lenders may allow you to make part prepayments on your loan every year. If you are willing to make such payments, you can enter the details in the calculator and the result will guide you on how much you will save on interest payments and by how many years your tenure will get reduced.