Education loan has become a necessity if you aim for higher studies. However, education loan interest rates in India are high. The reason is that banks take a lot of risk when they provide an education loan. There are a lot of uncertain variables related to the applicant including but not limited to the ability to complete the course on time, ability to secure a job, etc. So, banks not only charge high education loan interest rates but also ask for security or collateral in many cases. Therefore, it is imperative for you to know how an education loan works. But, what would happen if you were unable to repay your education loan? Well, in cases that do not involve collateral or security of an asset, the bank offers a one-time settlement. Let’s find out more about it:
One-Time Settlement for Education Loan
So, what is one-time settlement offered by the banks? A one-time settlement is offered by the banks on loans that are considered near to becoming a Non-Performing Asset (NPA). In this situation, a bank decides to cut its losses by considering an amount below the value of the loan. So, if you are unable to make repayment on your education loan, considering there is no collateral then the bank will offer you to settle the loan at a reduced value. But, this option is only considered by the bank when the applicant does not comply with warnings and notices.
You should always try to make timely repayments on education loan, otherwise it will hurt your credit score, and you could be included on the CIBIL’s defaulter list. However, if you are unable to do that and you are offered a one-time settlement, you should know the consequences before making a decision. If you are offered a one-time settlement and you accept it, then your loan obligation will be complete. But, it will still hurt your credit score. On the other hand, if you do not accept it, you will be considered a defaulter which would have even worse consequences as mentioned above.
Instant Education Loans! Now at Your Fingertips!
Education loan interest rates in India are very high, even when offered by banks. However, people still prefer to avail loan from banks, even though they have to deal with tedious paperwork and long approval process. But, now you don’t have to suffer due to the outdated and sluggish processes of banks. You can avail education loan till INR 2 Lakhs without collateral instantly from PaySense. The education loan interest rate is not too high compared to that of bank. Also, you don’t have to do much, just download the PaySense Mobile App and get started!
Apply for Loans of upto ₹5 Lakhs easily using your phone or laptop, and pay back on low EMIs