Demand for education loans rose to a record level in 2020 despite the pandemic, writes The Economic Times.
Education loan companies – which include banks and non-bank lenders - have disbursed Rs 11,000 crore loans in the 12 months through September 2020, according to data from CRIF High Mark, a credit bureau. A bulk of the disbursals happened through the pandemic period with more than 3 lakh new borrowers signing up for loans between March and October 2020.
As of October 2020, the outstanding education loans totalled Rs 1 lakh crore, the highest on record.
Lenders and industry experts said the pandemic has given a big impetus for people to upgrade – be it signing up for an executive education programme or enrolling for short-term upskilling courses.
Fear of job losses, rapid disruption in the workplace and stagnant scenario in terms of increments and promotions are prompting several professionals to learn the ropes of the post-Covid world. Top management institutes imparting executive education have also seen a spurt in interest from professionals wanting to sign up as the disruption pushed people to upgrade themselves to increase their opportunities for career growth.
Said Amit Gainda, chief executive, Avanse Financial Services: “Apart from an increase in domestic upskilling, we have also seen a 35% increase year to date in the applications for overseas courses as an increased number of people wanted to enroll for foreign institutions which ran most part of the year in the hybrid mode.”
Though some of the big-ticket loans (Rs 50 lakh to over a crore) for study abroad programmes have taken a hit last year, loans for domestic courses as well as upskilling programmes went up, thus leading to an increase in the overall loan demand, said Varun Chopra, CEO of Eduvanz Financing. Typically, loans for domestic programmes range from Rs 5-6 lakh to Rs 15-20 lakh.