What is the warranty limit?
In the current scenario, the government credit guarantee fund facility is available for loans up to Rs 7.5 lakh. That is, for loans up to Rs 7.5 lakh, the bank does not require any kind of security or collateral from the students. For this reason, the loan is available quickly. The government will increase the loan guarantee fund limit from Rs 7.5 lakh to Rs 10 lakh. As in other sectors, inflation has increased in the education sector, so the central government is considering increasing the loan amount. According to the Indian Express report, the relevant department of the Ministry of Finance has started discussions with the Ministry of Education. In this, it is envisaged to increase the guarantee limit of the education loan to 33%. Due to this decision, the loan limit will increase in many parts of the country. This rule is purely related to loans obtained under government programs, in which the government provides loans to students.
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What does the government think?
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According to an official, the Department of Financial Services is considering increasing the limit on unsecured loans for education and is in talks with the Department of Education about it. If all goes well, students can avail loans of 10 lakhs or more without any collateral. Earlier, it was reported that government banks were hesitant to provide small amounts of education loans and provided for the possibility of default. The students complained about this waste of time on the part of the government bank. The government then ordered banks to provide student loans as soon as possible; But now the decision process is underway to increase the loan limit. Thus, banks will not have to worry about defaults on loans up to Rs 10 lakh as the government will guarantee it. At present, loans up to Rs 7.5 lakh are unsecured. For which students only have to pay a small fee as insurance. Increasing the warranty limit may increase insurance costs, but not by much.
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