Planning to take an education loan? Here're the rates offered by banks

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Repairing your credit score and regaining access to the loan market could take three years or more.

  • According to the recent data released by the Reserve Bank of India (RBI), education loan outstandings of banks have fallen for the second year in a row, due to high delinquencies
  • Education loan outstandings fell from Rs 70,100 crore in March 2017 to Rs 69,700 crore in March 2018. They fell by another 2.5 per cent to Rs 68,000 crore in March 2019
  • The NPA level in this segment stands at around 8.7 per cent
  • Most of the bad loans are offered by public sector banks. They are unsecured in nature, and are taken for graduate courses. As students find it difficult to find jobs after such courses, they tend to default
  • At an individual level, defaulting on an education loan can have catastrophic  consequences
  • Your credit score will take a hit and you will be excluded from the loan market altogether
  • Take an education loan only if you have got admission to a course and institution that carries a high probability of getting a job after completion of the course, or if your parents will repay the loan
  • According to experts, it could take a defaulter three years or more to repair his credit score and regain access to the credit market once again



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