The High Court has directed that banks should not reject a student’s education loan application because of a low CIBIL score. Justice P.V. Kunjikrishna’s observation was. It was suggested that banks should adopt a humanitarian approach while considering the application for education loan. The court passed this order on a petition filed by Aluva resident Noel Paul Freddy. Last mail the court had also directed to disburse a loan of Rs 4,07,200 to the petitioner. Meritorious students cannot be denied an education loan just because their parents have a low credit score.
How should the repayment be made?
Most of those who have taken an education loan continue to repay the loan immediately after getting a job. . How about a doubt of someone who has paid off a substantial portion of the loan in the last four years.Would it be better to close the education loan together or to close the loan account as early as possible by paying only the EMI and investing elsewhere to get higher returns? It is an advantage to claim income tax exemption on education loan interest.
Those who have opted for the old tax regime will get this benefit. Although market linked investments are volatile, they can generate high returns. But loan repayment should be the priority. As the repayment increases, so does the amount wasted in interest. But consider investing small amounts in a way that does not affect the repayment of the loan or the ability to repay the loan quickly.
Consider setting aside a large lump sum for investment once the debt is fully settled. Being debt-free can be helpful even if you are willing to take some risk in pursuit of higher returns. But occasional risk-taking for investment purposes can make debt holders more vulnerable. Therefore, debt settlement itself can be prioritized. For this one can opt for loans with pre-closure option. Once the amount is in hand together, the loan can be closed
