Education and Career Forum

Dear Sir,
I took Education Loan of Rs.7.5 lacs for my son to study in Abroad from Indian Bank. At the time of signing the documents we were asked for Fixed Rate or Floating Rate options. We had opted for fixed rate option. Now the interest rates have gone higher and the Bank wants us to pay interest at a higher rate saying that the option for a fixed rate was never available with the Bank. Please advise what we should do under the circumstances? Is there any RBI circular regarding charging of interest at Fixed or Floating rates to the Nationalized Banks. Please advise me.

The clause of fixed interest rate is totally invalid. There is no such clause for education loan. This is because the rate of interest is governed and regulated by Reserve Bank of India and fluctuates from time to time as per the RBI orders. So this is not in the hands of Indian Bank and the conversation concerning fixed and floating rate of interest stands null and void if you do not have any proof of such assurance from the bank. There can be two things - either the bank manager might have misled you at the time of signing the documents or he/she might have been talking of some other clause. You have no other option except for paying the interest as per the current rate of interest if you do not have any proof supporting your conversation with the bank and opting for fixed rate of interest. If you have proof, you can take legal action.