The latest advancements have left the students glued to their computers and mobile screens for online classes and their education. Banks and NBFCs have considered that and have enhanced their loans and eligibility with easy redressal for students doing online classes and applying for online certification courses. The online study mode has been upgraded with the help of startups like BYJU’s, upgrad, and Great learning. They have now started offering students certain long-term and short-term courses that a student can purchase according to their convenience. Such startups have turned their eyes toward the banks asking for financial assistance for their students.
The problem that arises, in this case, is that the education loan does not cover the charges and the platform of online certification courses done by startups. The reason behind this is that a student can only avail the benefits of an education loan if the course is done by an institution approved by the University Grant Commission (UGC), All India Council for Technical Education (AICTE), or any State or Central government. In such a case, the students have no other option than to apply for a personal loan to cover the additional course charges. The interest rate of the Bank of Baroda Personal loan is higher than that of their education loan and so a lot of students have had to take the higher costing loan to complete their online education. Education loans had higher benefits like low-interest rates, tax benefits under section 80 E, and the moratorium on repayment which cannot be availed for personal loans taken for online education.
Harshadkumar Solanki, General Manager- Mortgages and other Retail Assets, Bank of Baroda in a statement said that the Bank is currently focusing on the education loan for regular courses, executive development courses, and skill development courses. Bank of Baroda is actively looking for ways to expand its scope within the Indian Banks’ Association (IBA) guidelines.