Education Loan Default: Chennai Court Orders ₹2.9 Lakh Repayment to SBI

In a recent legal development, a city civil court in Chennai has ruled against Education Loan Default, mandating the repayment of ₹2.9 lakh to the State Bank of India (SBI). This court order is related to a loan sanctioned in April 2013 for the educational pursuit of the son, Vignesh Kumar, aiming to undertake a postgraduate degree in computer science. Background and Loan Agreement The court’s directive requires both Vignesh Kumar and his father, Muniraj, to repay the original loan amount along with accrued interest. The court has imposed an interest rate of 9% from the date of filing the suit until the decree date. Subsequently, an interest rate of 6% starts from the decree date until the actual realization of the suit amount. Agreement Terms and Education Loan Default The State Bank of India had sanctioned a loan of ₹1.6 lakh, and an agreement was reached in June 2016 between the bank and the borrowers for the repayment schedule. The borrowers committed to repaying the loan in 60 EMIs of ₹3,679 each. Additionally, they agreed to pay interest on floating rate loans and any other debits raised in the account, including charges and fees, in instalments from June 2016 onwards. Despite the agreed-upon terms, no payments have been made by the borrowers to date, prompting the State Bank of India to file a suit in 2021. Court’s Ruling and Implications on Education Loan Default Assistant Judge S Priya delivered a decisive ruling, declaring that a total of ₹2.9 lakh […]