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EDUCATION LOANS BOON OR BANE

According to the data compiled by the Indian Bank's Association (IBA), the data collected from 50 banks show the findings of the survey in a clear cut manner.  The statistics clearly shows that there is decrease in the loan amount per student by 32%.  Thus, while the number of students who took loans went by 50000, the funds sisbursed by Bank's towards student leans fell by more that Rs.30000 crore in the year 2011-12. Getting an education was a problem in the past but now getting an education loan has become comparatively easy.  Student, who is aspiring to go for higher education should come to know various requirements needed to get aEducation loan.  One should know the extent of loan available and what expenses are covered under the loan scheme.  The main thing is that now-a-days Banks insist for collateral security or a guarantor for the Bank loan. Care should be taken to note that Security by way of mortgage is needed for theeducation loan.  A third party guarantee is also needed to cover the loan.  One should also ensure to get a flexible repayment option apart from low interest rate for the loan.  No repayment penalty is to be levied if the loan instalment is paid in advance.  It is needless to have minimum or no collateral required and the repayment should start once the candidate applied for the loan get an appointment.  Education loans by their own way are very risky because repayment is generally dependent on sufficient increase in income generation after the completion of the course. Globally, Education Loans are supported by the Governments because, they create qualified human capital for the country concerned. The number of Indian students going for the loans in 2011-12 is 8.6 lakh and the total funds disbursed by Bank's in 2010-11 Rs.11200.53 crore and that shows decrease of 28%.  It is time to give more education loan by Banks.