Guarantee Limit for Education Loan to be increased to ₹ 10 Lakh

The present guarantee limit for education loans is 7.5 lakh, but the central government may raise it by 33 percent to 10 lakhs.

Under the Credit Guarantee Fund Scheme for Education Loans of the Central Government, student loans are guaranteed (CGFSEL).

According to the scheme, a student may obtain an education loan up to a maximum loan amount of 7.5 lakh without providing any collateral security or third-party guarantee.

According to a report in the Indian Express, the Department of Financial Services under the Ministry of Finance is reportedly engaging the Education Ministry to increase the maximum guarantee amount to 10 lakhs. The revised guarantee maximum could be increased to around 10 lakh or possibly higher.

In August, the Department of Financial Services met with representatives from each of the 12 government-owned banks to discuss goals for disbursing student loan funds. A bank representative requested that the administration introduce uniformity to the guarantee limit for student loans during the discussion.