In today’s competitive era where globally economies are experiencing transition to knowledge economy, many recognise that education is paramount and most youth have aspirations to acquire higher education. The demand for professionals too is increasing all over the world and thus education institutions are also mushrooming as students (with co-operation and encouragement from parents) want to well-equip themselves. Amid this banks and Non-Banking Financial Companies (NBFCs) too have ventured into a new line of business by offering education loans, aiding today’s youth to get all geared-up to be a part of a knowledge economy. At PersonalFN we think that if a provision for high education hasn’t been made by parents, one could opt for an education loans available today; but it is imperative to be read the terms and conditions well and then opt for one.

You see, today with banks being stung by bad loans in the education loan segment, they are buying an insurance cover to default risk. So, while you are opting for an education loan to pursue high education, banks often push education loan insurance products, at the time of disbursement. The education loan insurance policy is often of the value of loan availed by you and is assigned in favour of the bank. Thus by doing so, the bank indemnifies its risk as they would receive the entire outstanding loan amount in case of any eventuality. But for borrowers, this strategy of banks makes education loan costlier. Typically, cost of insurance cover with education loan is 2-3% of the loan size.

While education loan insurance is not mandatory like when one avails of a home loans, banks are insisting that the borrowers opts for it (education loan insurance) ascertaining the current job market scenario. The lull in the domestic economy and uncertainty global economic conditions is reflecting its detrimental impact on the job market with poor campus placements and selective job openings.

PersonalFN is of the view that, given an uncertain economic environment which reduces the prospects of regular loan repayment, opting for an education loan insurance while you want to get well-equipped in a knowledge economy isn’t a bad idea and in fact is win-win for you as well as the bank, although you will have to pay a little more.

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parmanand.singh34@gmail.com Aug 22, 2018 My daughter have education loan of Rs 17,50000/- for 15 years from Bank of Baroda. Now I want insurance cover for the same please intimate premium.
parmanand.singh34@gmail.com Oct 13, 2018 My daughter have taken education loan of Rs 1750000.00 from Bank of Baroda for persuading PGDM form IMT Ghaziabad. Please intimate premium for cover the said amount through insurance.
Farzeenhaseeb@gmail.com Sep 02, 2019 I want education loan
Farzeenhaseeb@gmail.com Sep 02, 2019 I want education loan
Farzeenhaseeb@gmail.com Sep 02, 2019 I want education loan

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