Getting education loan to get easier from next year, only digital admission letter would by enough to get loan
Reserve Bank of India (RBI) is all set to introduce a "frictionless credit mechanism" in the near future. As per a TOI report, this revolutionary development is expected to streamline the application process, making it more accessible and hassle-free for aspiring students.
Under this forthcoming system, prospective borrowers will no longer be burdened with extensive paperwork and complex procedures.
Instead, a confirmed admission offer, obtained digitally, will serve as the primary requirement for securing an education loan. This innovative approach seeks to eliminate the traditional hurdles and delays associated with the loan application process.
The introduction of this «frictionless credit mechanism» aligns with the RBI's ongoing efforts to promote financial inclusivity and technological advancements.
As part of the broader initiative, the RBI has established the Innovation Hub platform, where borrowers can conveniently access information to assess their repayment capacity.
Speaking at the G20 Summit, a senior RBI official elaborated on this groundbreaking initiative. He revealed that the «frictionless credit» concept, initially introduced for farm and dairy loans, is poised for expansion to encompass education loans.
The official confirmed that this transformation is scheduled to be implemented by the next academic session, commencing in 2024-25.
This development holds the promise of a more straightforward and efficient process for students aspiring to pursue higher education. It signifies a significant step towards enhancing access to education financing and reducing the complexities that have historically impeded students' educational pursuits.
The RBI is showcasing various digital initiatives in the financial
