Banks would soon be offering education loans with lower interest rates for students having higher grade. Also a better grade would increase the chances of the applicant in successfully getting a loan sanctioned. This comes as a result of finance minister P.Chidambaram's meeting with heads of state owned banks. Mr. Chidambaram had asked banks to sanction education loans at lower rates for deserving students.
The banks will be getting the 'deservingness' of an applicant through credit scores derived by credit information companies. The credit rating would also depend upon the concerned educational institute.
According to the proposed plan, the credit score would depend on the students' grades, course, previous loans, institute applied and the employability.
In addition to it, the banks are also considering relaxation of norms regarding education loans for vocational courses. Presently many banks are offering high cost personal loans to students who get admissions through management quote, the finance minister has also showed his dissent on the same, stating educational loans as a right of every student who meets the criterion.
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