Monday, June 22, 2009

Education loan an effective option to meet higher education expenses

The cost of education has increased especially of the higher education. In this situation for students the education loan is the effective option to meet the expenses of their studies.

The admissions are going on in the colleges thus not only the IIT aspirants, the students taking admission in professional courses are also seeking for the educational loans.

One of the student Ananya Chatterjee who has applied for an education loan from ICICI bank said, "Professional education is getting more expensive with each passing year, but this doesn't mean that one has to compromise with his/her career. So, it is important to apply for bank loans if you're certain that you will get a secure job after finishing your education". She desires to do MBA from a leading institution in the country.

Like Ananya there are thousands of other students who are applying for educational loans this summer. Silky Mehra, working in the education loan department of a private bank stated, "The number of applicants for the loan is increasing every year and banks are reaping the maximum benefits of this new trend". She added, "This trend has picked up over the last seven-eight years."

Madhur Tewari, currently working with an organization in Pune, dealing in Consultancy Services told, "This loan went a long way in making me realize my responsibilities. I did not have to depend on my family to fund my education."

"Mostly the middle class salaried section of the population asks for these loans for their wards," says a senior officer of Punjab National Bank.

It has been observed that management and technical education like engineering and medicine have remained the major areas where banks are ready to give loans. Arvind Varshney, a senior official in a commercial bank pointed out, "Students going for engineering or medical come with the applications for the funding. Banks provide loans to the students who have a proven academic record and are likely to get campus placements".

Although in recent years, the demand for loans for MBA course has increased. According to Varshney, "This is an emerging field and is definitely providing good jobs to students".

Meanwhile banks are trying their best to attract students. A senior bank official said, "The bank is providing loans to the students on lesser interest rates. Further, we do not demand any personal security from the students".

Gupta points out, "Further, if the interest is serviced during the study period by the parents, students will get one per cent concession on interest rates". He added that their loan amount not only includes tuition and hostel fees, but a host of other things. He stated, "Students can buy a computer with the loan amount if it is necessary".

It is to be noted that education loan sanction schemes are showing one of the highest rates of growth among all loan segments.