I am 23 years and residing in Mysuru. I was a brilliant student and secured a seat in electrical engg in a reputed college in Bengaluru 4 years ago. The course fees was INR 4 Lakhs and I took an education loan of INR 5 Lakhs from a reputed bank as my parents could not afford the fees. I passed in first class but even after 4 months I have not found a job. I don't have the money to repay this loan. I don't know when I will get a job and my friends have advised me to default on this loan. What have I to lose anyways?
Yes, your education loan is unsecured and you may be tempted to default as your friends suggest. These points will tell you what happens if you default on the loan. 1. Bank could send recovery executives to your residence who could talk to your neighbors. Your reputation would be lost. 2. Not only your cibil score but also your father's cibil score is affected as he stood guarantor to the loan. 3. Some companies have strict policies against hiring people who have defaulted on loans. You have a moratorium period where you can repay the educational loan either within 6 months after you get a job or after a year of completing the course, whichever is earlier. If you are struggling to find a job in your field, take up a part time offer just to pay the bills and repay the loan.
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