InvestorQ : Why bank does not allow loans to students?
Ashwini Kadam made post

Why bank does not allow loans to students?

2 years ago

If you are a student planning to fund your higher education through an education loan, be warned. Many who have taken this path before you have defaulted. Non-performing assets (NPAs) within the education loan segment have been rising. According to data from the Indian Banks Association (IBA), NPAs in this segment rose from 7.3 per cent in March 2016 to 7.67 per cent in March 2017, and further to 8.97 per cent in March 2018. Clearly, repaying an education loan is proving to be more difficult than many students and parents imagine.

Banks don't take a security or collateral up to ~400,000. This is the segment where the NPAs are highest. Students who have taken such low-value loans take up jobs in another city, do not inform the bank, and hence become hard to trace. Sometimes, students become untraceable because they move abroad. Loan repayment is much better in the segment above ~750,000, where banks demand a collateral.

A student can take educational loan but normal loan is quite tough to get as a student can show income proof.

Source : goggle

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