If the education loan is not repaid after completing your studies, who will pay the EMI? Find out who will be at the receiving end.

If you have taken out an education loan and are unable to repay it, you should be aware of your responsibilities and rights to avoid problems.

Student Education Loan Repayment Rules: The modern world has brought about many changes. The most significant change has been in the field of education. People understand the importance of education and desire to provide the best education to their loved ones. Furthermore, rising education prices have led to an increase in the number of education loan borrowers. Students are required to repay the loan amount after completing their studies.

However, if a student is unable to repay the loan amount even after completing their studies, what kind of problems do the student and guarantor face in such a situation? What are their responsibilities? It is crucial to understand this topic so that you do not face any difficulties.

Who will pay in case of default?

Students who take out education loans are solely responsible for repaying the loan amount. However, if a student fails to find a job or drops out of school, they can request more time from the bank to repay the loan. They can also request the bank to modify their loan repayment terms.

If they still fail to repay the loan amount, the bank declares them a defaulter. The bank then makes it the guarantor's responsibility to repay the loan. The bank can collect the payment from the guarantor.

What happens if the education loan is not repaid?

If the education loan is not repaid on time, the bank first sends a notice. If the loan installments remain unpaid and the bank is not contacted, the bank initiates recovery proceedings. The bank can take necessary legal action, including seizing the property. Failure to repay the loan also impacts the guarantor's credit score, which could make it difficult for them to obtain further loans.