If you are planning to apply for an education loan, make sure you work on those grades, because the banks are watching. For, the higher the score, the better the chance of bagging a loan with a lower interest rate.
At a recent meeting between finance minister P Chidambaram and state-owned bank chiefs, banks were told to step up advances to deserving students at easier rates, a government source told HT.
But before loosening the purse strings, banks will get credit information companies to work out a credit score to rate the 'deservingness' of loan seekers. Education institutes may also come under the radar of rating agencies to facilitate banks in doling out loans.
A credit score is the "probability of default" of a student worked out based on the academic record, previous loans, institute and course applied to and employability.
According to sources, banks are also considering easing lending norms for vocational courses.
"We have asked all our branch managers to help every student who comes for such loans," TM Bhasin, chairman and managing director, Indian Bank told Hindustan Times.