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1. EDUCATIONAL LOANS

2. Getting education loans despite
tougher norms

3. The cost of higher studies has moved up substantially in recent years. Taking
loans for courses in higher education in both India and abroad is almost a
necessity. While these are more easily available than six to eight years ago,
students who are not from reputed institutions might still have to struggle for a
bank nod.
Speaking recently at the Business Standard Banking Round Table, Arundhati
Bhattacharya, chairman of State Bank of India, the country's largest public
sector lender, admitted banks were comfortable giving loans to students from
top institutes but reluctant when it came to less recognised ones.
Educational loans are not a problem at all for professional institutes such as
the IITs, IIMs and even good colleges in tier-1 or tier-2 cities. The problem lies
in giving loans to students in general streams and also studying in tier-3 and
tier-4 institutions. Banks are unsure of these institutions' standards and whether
the money will come back," she said.
The reluctance has grown in recent months because of the high level of
banks' non-performing assets (NPAs) in the sector. It is estimated that NPAs as
a percentage of education loans for public sector banks (PSBs) was as high as
eight to nine per cent.

4.  Generally speaking, the assessment of a loan is based on the student's earning
potential upon completion of the course. Banks look at reputation of the institute
and its job placement record, employability from the course and the student's
academic record.
Banks do not say so in public but they do have a list of courses and institutions
that they will be comfortable lending to. If your college or institution does not fall
under this list, your loan request might get rejected.
Students also have the option to approach a non-banking finance company
(NBFC). "We are getting good demand for domestic as well as overseas courses.
We offer loans of anywhere between Rs 1 lakh and Rs 50 lakh, and offer
competitive interest rates vis-a-vis banks," said Saxena. Sectoral officials believe
NBFCs could charge anywhere between half a per cent and one per cent more
than banks for education loans.
Students with a family income of less than Rs 4.5 lakh can even apply for
education loans under the Central Scheme for Interest Subsidy.

5. Under this, the interest payable by a student availing an educational loan for
technical & professional courses for the period of moratorium (i.e course period
plus one year or six months after getting a job, whichever is earlier) under the
Educational Loan Scheme of the Indian Banks' Association shall be borne by
the government.
After the period of moratorium, the interest on the dues shall be paid by the
student, in accordance with the provisions of the existing Educational Loan
Scheme.
There are few more things to consider. Most students who apply for loans
don't have a credit track record. If a student has been using a credit card, he
should pay his dues and remain debt-free before applying for a loan.
This will increase the bank's confidence, albeit in a small way, in the student's
repayment capability. Students would also do well to go for secured loans and
make their parents co-applicants.
If the parent's house is put up as security, the interest rates charged could be
lower by 150-250 basis points, say experts

6. https://www.facebook.com/AvanseEducationLoan
https://www.linkedin.com/company/avanse-financial-
services
https://twitter.com/avanseeduloan
https://plus.google.com/+AvanseFinancialServicesLtdMumbai
https://www.youtube.com/channel/UCcsuUx1EH1C08XmX2embpug
 source : http://www.business-standard.com/article/pf/getting-education-loans-
despite-tougher-norms-114121500011_1.html#

7.  Read more on Educational Loans : http://www.avanse.com/avanse-
education-loans/