Following the recommendations from Indian Banks Association (IBA), Indian public sector banks will consider revamping the education loan policies. The major constraints earlier had was 1) Education loan was assured only to one member of the family and 2) Shorter repayment tenure (5 to 7 years).
The problem with the above two constraints is if an elder child from the family takes loan the younger one’s are usually denied and shorter repayment tenure will overload the customer with increased monthly installment or EMI.
Thanks to the new policies proposed by Indian Banks Association which will ensure that more than one person in the family will have an opportunity to avail the education loan benefit and the repayment period will be hiked to 10 to 15 years. In addition new applicants for education loans here after will get feedback as why the loan was denied if at all if they are not sanctioned loan.
Education loan disbursement saw low this year compared to previous year, hence IBA had stepped in to increase the education loan disbursement.
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