Must Know Th­ese

Consumer Voice - - Bfsi -

Bank’s con­di­tions: While sanc­tion­ing a loan, the bank will check if a stu­dent has ac­tu­ally se­cured ad­mis­sion to a course, the qual­ity of the col­lege and the course (whether it is recog­nised by the Univer­sity Grants Com­mis­sion or the All-In­dia Coun­cil for Tech­ni­cal Ed­u­ca­tion), if the stu­dent has the abil­ity to se­cure an ap­pro­pri­ate job af­ter the course, and, where ap­pli­ca­ble, the credit his­tory of the co-ap­pli­cant or guar­an­tor. Doc­u­ments: The most com­monly re­quired doc­u­ments are: a) proof of ad­mis­sion (ed­u­ca­tional loan can­not be ap­plied with­out proof that ad­mis­sion has been se­cured in the se­lected in­sti­tu­tion); b) sched­ule of fees from the in­sti­tu­tion; c) mark sheet of the last qual­i­fy­ing ex­am­i­na­tion; d) de­tails/state­ments of bank ac­counts held by the stu­dent ap­pli­cant for the last six months; and e) pho­to­graphs. Charges: Banks charge you pro­cess­ing fees for ap­prov­ing the loan and ba­si­cally do­ing all the pa­per­work. Th­ese fees range be­tween 2.25 per cent and 2.50 per cent. An­other charge is the mar­gin amount. Nor­mally banks do not ap­prove the loan that would cover the en­tire cost of your ed­u­ca­tion. For ex­am­ple, for a loan of Rs 10 lakhs, the bank will ap­prove only 80 per cent or Rs 8 lakhs. The ad­di­tional Rs 2 lakhs that you will have to raise from your own sources is called the mar­gin amount. Re­pay­ment: Most banks ask you to start pay­ing off the loan ei­ther six months or one year af­ter you com­plete the course, or six months af­ter you have se­cured a job, which­ever hap­pens first. It is im­por­tant to re­mem­ber that the higher the amount, the longer you get to re­pay. How­ever, this does not mean that you are not charged any in­ter­est for that pe­riod. Although some banks may de­fer in­ter­est pay­ment, in­ter­est is ac­tu­ally cal­cu­lated from the day of dis­burse­ment of the loan. banks (for a nom­i­nal fee to be paid by the mem­ber banks ev­ery year to keep the guar­an­tee afloat). Cor­pus con­tri­bu­tion to the fund shall be made up­front by the set­tler – that is, the govern­ment of In­dia – on an an­nual ba­sis. In case of de­fault and in­vo­ca­tion of claim, the Fund shall set­tle the claims of the lend­ing in­sti­tu­tion af­ter due dili­gence and 75 per cent of the guar­an­teed amount shall be payable as first in­stal­ment; the bal­ance, if any, shall be paid af­ter con­clu­sion of re­cov­ery pro­ceed­ings and as­cer­tain­ing the net/ fi­nal loss in­curred by the lend­ing in­sti­tu­tion.

Credit guar­an­tee fund for higher ed­u­ca­tion

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