Non-repayment of education loan can now affect one's credit score, a top official of Credit Information Bureau (India) Ltd (CIBIL) has said.
"The education loans have to be paid once one completes his/her course and gains employment. Also, like any other loans and credit cards, education loans are also reported to CIBIL and get reflected in the borrower's CIBIL Report and impact the CIBIL Trans Union Score," said CIBIL Senior Vice President-Consumer Services and Communications Harshala Chandorkar.
CIBIL Trans Union Score is a key parameter relied on by banks while processing loan applications.
According to CIBIL data, the outstanding education credit, including for study within the country and abroad, stood at Rs 63,800 crore as on March 31 this year.
The data released by CIBIL throws significant light on education loan trends in the country.
While the demand for educational loan is need based, the number of new loan accounts opened in calendar year are almost same over the last five years, it said.
Noting that the third and fourth quarters of each calendar year witness a spurt in education loans, the data says about 1,30,000 education loan accounts were opened in the fourth quarter of 2014.
However, the average sanctioned amount continues to grow over time, it added.
"Average sanctioned amount in fourth quarter of 2014 was Rs 6 lakh, while in fourth quarter of 2013 it was about 4.5 lakh. In recent period, loans with amount less than Rs 1 lakh has reduced below 10 per cent of total sanctions while loans with ticket size/amount of more than Rs 5 lakh have gone up to almost 30 per cent of the total sanctions.
"In fourth quarter of 2014, loans of ticket size of more than Rs 5 lakh were around 30 per cent of total sanctions while in fourth quarter of 2012, loans of more than Rs 5 lakh comprised about 22 per cent of total sanctions," CIBIL said.
It says delinquency on education loans has decreased over the past year.
"Delinquency for 90+ days amount overdue was around 3.50 per cent in fourth quarter of 2013 which has lowered to 2.70 per cent in fourth quarter of 2014," says the data.
Stating that bad loans from education segment are very high, the Reserve Bank's Deputy Governor R Gandhi had asked CIBIL and banks to "counsel" the youth on good credit behavior during the CIBIL Trans Union Annual Conference in March, CIBIL said in a release.
