Banks to offer Insurance cover for Educational Loans
Banks like Andhra Bank and State Bank of Hyderabad will now offer educational loan products with insurance cover to make them more attractive for the customers and safer for themselves.
The educational loans re-payment schedule may stretch up to nine years and the liability insurance shields the risk. In the event of any tragedy (death or incapacity), the loan repayment will be taken care of by the insurer.
Reports in Hindu Businessline say that Andhra Bank’s educational loan portfolio had grown by 34.7 per cent to Rs 953 crore in the first quarter of 2007 compared to Rs 707 crore in the same period in 2006. The bank has a tie-up with Life Insurance Corporation for the purpose.
Though dependent on the loan amount and repayment schedule, the average premium amount works out to a little over Rs 1,000 per lakh per annum.