Guarantee Free Loan – The central government may soon increase the guarantee limit for education loan from Rs 7.5 lakh to Rs 10 lakh. In Delhi and West Bengal, this limit is already Rs 10 lakh.
New Delhi. Now in the coming time, students can take a loan of 10 lakh rupees (collateral free loan) for higher education without any guarantee. The central government may soon increase the guarantee limit for education loans from Rs 7.5 lakh to Rs 10 lakh.
The government’s move comes after a large number of loan applications were canceled and complaints of delay in getting approvals increased. At present, education loans up to Rs 7.5 lakh are given without any guarantee. This means that banks do not ask for any guarantee for loans up to this amount.
The Department of Financial Services in the Ministry of Finance has initiated talks with the Ministry of Education to increase the guarantee limit by 33 per cent. With this move of the government, like some states like Delhi and West Bengal, students across the country will be able to take education loan up to Rs 10 lakh without guarantee.
These state governments have already increased the total guarantee to Rs 10 lakh. According to sources, the Department of Financial Services, Ministry of Finance is in favor of increasing the limit of guarantee and talks are going on with the Ministry of Education.
Banks are reluctant to give loans Recently a report came out, which revealed that due to increasing default cases, now government banks are reluctant to give education loans. Banks have now become cautious in view of the high rate of default of around eight per cent in the education loan portfolio. Great care is taken in sanctioning such loans.
According to media report, loan education dues of other banks, including state-run banks, stood at around Rs 80,000 crore at the end of the June quarter of the current financial year. In the true case, a senior official of the bank’s government bank had told that due to rising NPAs, a cautious approach is being adopted at the branch level in sanctioning education loans.
Because of this, many genuine cases are also overlooked and these are also delayed. Recently, the Finance Ministry had called a meeting of public sector banks to take stock of the education loan portfolio. On the other hand, RBI had said that there has been a sharp increase in the NPAs of education loans given by commercial banks in India in recent years, which is a matter of concern.
