Asked July 04, 2016

Have been classified as NPA

  • 1 Answer

Hello Sirs, I had taken Education loan of Rs 1.5 Lakh in December 2011 from Central bank Of India,Surat. I finished my course with 1st division in September 2013. Even then, I didn’t get job for about 1 year and I also stared preparation for government job exams. It was in October 2014 that I got a job with salary 10000. Me , my mom and my 2 younger sister are staying in home.. My mom doesnt have job, MY dad passed away when I was in 1st Year of College. Due, to these financial constraints,I was unable to pay the EMI of Rs. 3500 every month towards the loan. The bank manager had agreed to my request that I would pay 1500 every month as EMI. But, now they are saying that my loan is under default and that your account is Classified as a NPA and you have to pay 139000 in seven days or legal action should be taken against you. Please Give me an advice that what can I do to avoid legal action against me? Expecting your kind response

Answer 1

Answer by Sammanika Rawat, Lawfarm Researcher:

We approached the Bank Managers of three different banks to get a solution.

In this reply I shall share some of the basics for education loan so that it can help other readers as well.


The education loan is given for studies to the students on a fixed interest rate. The repayment duration is commonly set of 120 months (10 years) in private banks and 15 years for government banks. The repayment starts from the year of completion of course + 1 year or from the time of employment, whichever is earliest. 


In your case, the repayment should have started from the year 2014 itself (Assuming that your course completed in 2013). An account is declared as Non Performance Asset/ Loan when there is default on the payment. In case you have done all the sufficient payments every month from 2014 to July 2016 then you can consult your Bank again. Please ensure that you had sufficient documentary/written proof that your EMI was reduced from 3500 to 1500. If you have it in written then the Bank can consider it assuming they had not updated it in the system. In case you do not have a written statement from Bank mentioning that your EMI was reduced from 3500 per month to 1500 per month or you defaulted in paying all your instalments till now, you shall have to pay the entire amount due till July 2016 to bring your account of NPA. 

The re-schedulment of repayment repayment of education loan can be done as a one time measure if the borrower request for the same for any type of constraints. If it's already done by the bank and the repayment has been given once then you shall have to pay the amount asked. 

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