Education and Career Forum

Dear Sir/Mam,

I want to apply for an Education Loan from Bank to do MS in Abroad. I have heard that RBI sets risk weightage of Education Loan. Can you please provide me the details of this risk weightage set by RBI? Awaiting for the answer on this.

Thanks!

The Reserve Bank of India (RBI) sets risk weightages for different types of loans, including education loans. The risk weightage for an education loan is determined by the borrower's credit score, the purpose of the loan, and the collateral.

For education loans, the RBI risk weightage is currently 75%. This means that for every Rs.100 that a bank lends for an education loan, it will only consider Rs.75 as a loan exposure. The remaining Rs.25 will be considered as a risk reserve.

The RBI risk weightage for education loans was revised in 2019. The previous risk weightage was 100%. The reduction in the risk weightage was done to make education loans more affordable for borrowers.

The RBI risk weightage for education loans is reviewed every year. The risk weightage may be increased or decreased depending on the prevailing economic conditions.