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| transactions and are withdrawn only once.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