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Gayatri   02 September 2016

Student loan settlement

My sister took a student loan for Rs.12 lacs in 2010 for her studies in this US. She completed her education and moved back to India but has been unable to find a job since 2012. Our house is held as collateral with the bank so I decided to help my family out. I started making payments on her behalf since last 1 year and have paid about 6-7 lacs so far but in the meantime the cumulative interest on the loan has increased substantially and we now owe the bank Rs.20lacs. I approached the bank and requested them to take a settlement for Rs.10lacs as this combined with what I have already paid more than covers the Principal amount. Is there any hope that the bank will accept?


Learning

 3 Replies


(Guest)

try to enter into a one time settlement

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     03 September 2016

This is not a legal question. As per the extant legal provisions, a person who has taken loan has to necessarily repay such loan.

 

Compromise is a facility brought in by banks to get back their dues without initiating legal action.  Therefore, it is the prerogative of the bank to accept or not to accept the compromise. You may have a proper discussion with the bank officials and negotiate to come out of the liability.

G.L.N. Prasad (Retired employee.)     03 September 2016

Once they have collateral, why should they ?

Whose money they have advanced ?

Are they not accountable ?

What is the purpose of taking collateral ?

Who should suffer for personal problems the Bank or person?

Can a banker say to depositor, as they have having lot of NPAs in educational loans, they can not refund deposits made by Public ?

There is no possibility for a compromise, unless they publish such a scheme and even in that case, the chances of agreeing for less amount is out of question.   They may as a special case wave penalty for genuine reasons.

Because the Bank is advancing, without planning that if some things go wrong, what should be the alternative ?  Bank is having alternative of collateral, but plan the student has before applying loan is not known.  Hope and practical planning are different.


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