Can RTI help after a Loan Rejection

For many Indian students, Education loans are the best option for turning their dreams of an overseas education into a reality. However, the road is not always easy; many students face loan rejections, which is a setback in their journey.

Oftentimes, students wonder why their Education Loan was rejected. Knowing the reasons for loan rejection can help students successfully reapply and get an education loan. 

What is an RTI? In Brief

RTI stands for Right to Information. RTI  was established under the Right to Information Act of 2005.  RTI is a fundamental right of the Indian citizen. The main aim of this act is to bring transparency and accountability to the government entities.. 

This act helps individuals to access information from the public authorities. Public sector banks are also considered government bodies; hence are accountable.RTI helps students and families in seeking information regarding the reasons for loan rejection.

Can RTI help if a Student Loan is rejected?

Yes, RTI helps students if their Loan is rejected. If the loan is rejected and the reasons for rejection are not provided by the lender, filing an RTI complaint allows the student to inquire about the grounds for rejection. 

This information can help students identify the reasons for loan rejection and potentially lead to another application or exploring alternate options.

Who can file an RTI against the Loan Rejection?

Generally, applicants can file an RTI against an Education loan rejection. However, students have to remember the fact that only public banks are responsible for RTI queries. Therefore, if your loan is being processed with the public banks, then only you can file an RTI.

Whereas private banks and NBFCs are not legally required to respond to RTI  queries. If the schemes, such as government-funded or subsidy-linked, are involved, then private banks are responsible for RTI queries.

If your Education Loan is rejected, and the public banks are not mentioning any reason for the loan rejection, then you can file an RTI requesting for

•  Reasons for rejection
• A copy of the loan evaluation report
• The bank’s internal guidelines for loan approval
• Details regarding the loan process were done as per the guidelines or not

Filing an RTI cannot guarantee the reversal of the loan rejection. However, this can reveal the reasons for loan rejection and help students work on the areas of rejection and plan better.

How Filing an RTI Benefits Students with Loan Rejections

Filing RTI can benefit students in many ways, as sometimes even loan rejections can be reversed. Let us understand how filing an RTI benefits.

Get Clear Details of the Loan Rejection: Many times, banks may reject the loan without properly mentioning the reason for rejection. Filing an RTI can force banks to provide a detailed explanation in written format. This helps students in analyzing what went wrong.

Reapply Strongly:  Once the banks give reasons for loan rejection student can reapply strongly by fixing the issues.

Holds Bank Responsible: RTI ensures banks follow proper procedures while issuing Education Loans, and if there is any negligence, RTI will bring it to the notice of the public.

Helps Students Understand the Bank Policies:  Through which students can ask the banks to reveal the loan procedure, required documents, etc. This will help students to reapply strongly next time.

What Information can you request under RTI if the Loan is rejected?

Students can request the following information under RTI if their Education loan is rejected.

Reasons for Rejection: The student can ask on what grounds the loan is being rejected.

Rules and Regulations of the Loan Process: Students can request what are the standard procedure rules and regulations followed by the bank while issuing the loan.

Criteria used for evaluation: What are the criteria banks have used to evaluate the eligibility of the Education loan for students?

The Process involved in Decision-making:  students can ask what process the banks have followed in deciding on loan rejection.

How to File an RTI

The following are the steps involved in filing an RTI

Identify the Public Authority: The first step to file an RTI is to identify the public authority to which you seek information. Public bodies include government authorities, departments, public sector undertakings, etc. In this case, the public bank is where the student’s loan is being rejected.

Draft the RTI application: The RTI application should contain the following details.

• The student's name and address
• The information that the student is seeking
• The reason why the student needs that information (in this case, loan rejection)
• Contact information of the student (phone no, Email address)
• Fee for the RTI application ( ₹10 for individuals and ₹50 for others). These fees can be paid by cash, a demand draft, or an Indian postal order. Individuals who are below the poverty line are exempt from paying the fees.

Submit the RTI application Form:  The RTI application form can then be submitted to the concerned public information officer (PIO) at the bank branch, either in person, by post, or online. A designated PIO is assigned to address RTI queries. Students can get the details from the official website of the bank.

Track the application: The student can track the application through the RTI online application portal.

PIO Responds: Within 30 days of receiving the application, the PIO is required to respond to the student. The response could be in the form of a written format or any form of information. In this case, the PIO could respond with the actual loan procedure of the bank, and what has been followed for the student.

In case the PIO does not respond within 30 days, the student can file a complaint with the Information Commissioner.

What to do after receiving the RTI response

After receiving the RTI's response, the student goes through the reply carefully what the issue is; it could be incomplete documents, low CIBIL score, university issue, or lack of collateral, etc.

If the issue is something among the above that could be fixed, the student can understand the issue clearly and reapply by strengthening the profile.

Documents required to File an RTI

The following documents are required to file an RTI.

• Documents proving the citizenship of the applicant, such as an Aadhar card, a PAN card, a passport, a driving license, etc.
• Documents of the particulars the student seeking information about.
• Receipt of the application fees
• Address details for future communication

Conclusion

RTI is one of the powerful tools that students can use to know the reasons for loan rejection. Often time banks do not respond with clear reasons for loan rejection. In this blog, we have explored how students can use RTI effectively while applying for Education loans.

Obtaining an Education Loan to fund your studies can be quite challenging, with different lenders offering varying options. Contact WeMakeScholars, an organisation partnered with over 15 public and private lenders. When you apply for an education loan through us, our experienced team will help you find the most suitable loan for your higher studies. Request a callback today to contact our team.