NEWS & ADVICE : EDUCATION LOANS
Education loans for coaching classes of entrance exams
By Neelima Shankar
Jul 19, 2012
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Banks are now providing education loans to students wishing to take coaching classes for competitive examinations, such as for the entrance exam of reputed engineering or medical colleges.

At present, public sector lenders such as Central Bank of India and Corporation Bank are offering educational loans for pursuing coaching classes which prepare students for popular entrance exams such as IIT entrance exam.

These education loans are unsecured loans, varying from Rs. 200,000 to Rs. 400,000, with a short repayment period of three years. The moratorium period is also short as compared to normal education loans. The moratorium period provided for such loans is three months only.

Banks also charge a lower interest rate on loans for coaching classes. The interest rates range from 11 percent to 12.5 percent. These loans cover not only the fees of coaching classes but other expenses also.

Talking on the matter, Mr. Ram Sangapure, general manager, retail of Central Bank of India says, "Many students appearing for entrance exams are from rural areas and move to cities for attending coaching classes. Therefore, they have to pay for boarding and lodging as well. Hence, these loans cover such expenses as well as coaching class fees."

He further added that the demand for loans for coaching classes is expected to increase by five to six percent due to the release of the new format of engineering entrance exams.


 


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