| Under no credit check student loans, credit is | | | | Unsatisfactory loan accounts may be discontinued |
| given for a definite purpose and for a | | | | at the discretion of the banker. The system is |
| predetermined period. Normally, these loans are | | | | comparatively simple. Interest accrues to the |
| repayable in installments. Funds are required for | | | | bank on the entire amount lent to a student.Every |
| single non-repetitive transactions and are | | | | time a loan is required, it is to be negotiated with |
| withdrawn only once. If the student needs funds | | | | the banker. To avoid it, students may borrow in |
| again or wants a renewal of an existing loan, a | | | | excess of their exact requirements to provide for |
| fresh request is made to the bank. Thus, a | | | | any contingency. Banks have no control over the |
| student is required to negotiate every time he is | | | | use of funds borrowed by the student. However, |
| taking a new loan or renewing an existing loan. | | | | banks insist on hypothecation of the asset |
| The banker is at liberty to grant or refuse such a | | | | purchased with the loan amount. Though student |
| request depending upon his own cash resources | | | | loans are for fixed periods, in practice they roll |
| and the credit policy of the bank.As the time of | | | | over, i.e., they are renewed frequently. Loan |
| repayment of the loan or its installments is fixed | | | | documentation is more comprehensive as |
| in advance for student loans, this system ensures | | | | compared to cash credit system. Under the cash |
| a greater degree of self-discipline on the borrower | | | | credit system, the banker specifies a limit for |
| as compared to the cash credit system. | | | | each customer, up to which the customer is |
| Whenever any loan is granted or its renewal is | | | | permitted to borrow against the security of |
| sanctioned, the banker gets the opportunity to | | | | tangible assets or guarantees. |
| automatically review the loan account. | | | | |