Many banks in India are mulling over extending repayment period of education loans which were taken by students to fund their higher education overseas, in the face of rupee plunging against pound and dollar in a major way. As per officials of India Bank, the change might lead to a lowering of equated monthly installments (EMIs).
As per State Bank of Hyderabad officials, the bank is contemplating extension of foreign higher education loan repayment period from the current seven years to ten years. The bank will also explore all avenues of restructuring the loans, bank officials added.
As per HDFC Credila officials, it is planning to extend loan repayment periods to around 15 years in specific cases.
Currently, educational loans rates are in the range of 11.5% to 14.25%, subject to the type of the course, its duration as well as the institute. If the total loan is to the tune of Rs 30-lakh, a monthly EMI of Rs 50,000 needs to be paid.
Few foreign countries including the United Kingdom have imposed severe and expensive visa norms to tackle the problem of illegal immigration. Due to this, Indian students will compulsorily need to return to the country on completion of their course.
With the rupee nose-diving and job opportunities as well as salaries shrinking, the Indian borrower will face a daunting task to repay bank loans after meeting living expenses. They might end up taking another loan or generate funds from alternate sources, as per various sources.
However, the entire chaotic situation has brought some relief for few. Students who acquired loans in previous years and are earning abroad after completing their course, will now pay lesser foreign currency for EMIs, towards the loan taken in rupees in India.
Source: The Times of India
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