Higher Education in US: Types of Collateral Security for Student Loans in India

 

 

If studying in US is on mind, then the biggest challenge of arranging the funds for higher education in US always stays on mind. Out of the whole exercise, arranging the funds is one of the most crucial part. In order to resolve the complexity of financing the higher education various banks have understood this scenario and are giving education loan for studying in USA.


Through this article you will gain insight on the factors to keep in mind before applying for a secured loan, the benefits of taking a secured loan and the following requirements.

Read on.

Factors to keep in mind before applying for a secured education loan to study abroad

Before beginning the process of loan application, it is important to know how much money you require and how much you are going to pay from your own pocket. Apart from this the other important factors to consider are as follows:
•    Finalising the University and the Course you want to pursue
•    Estimation of the total amount required for higher education
•    List of documents to be prepared as per requirement
•    Identifying the guarantor
•    Application for loan to be done 3 months prior to visa interview date
•    Loan disbursement time to be estimated

The Benefits of opting Secured Loan to study in USA:

•    The Rate of Interest is much lesser compared to unsecured loans
•    The amount of loan sanctioned is upto 1.5 crore if applied through Nationalised Bank
•    The EMI begins after the Course period + 6 months that is after the moratorium period
•    The Simple Interest to be paid during the Moratorium Period is optional; the amount will get automatically added to the Principal Amount
•    Tax benefit of 80 E can be availed under secured loan through which the Simple Interest is almost recovered
Aren’t these benefits great!


Let us now understand the types of collateral security that can be pledged if a Secured Overseas Education Loan is availed to study in USA.

Immovable Property:

One of the most frequently pledged categories of assets for a secured loan is an immovable property.
This category involves assets like
•    A House
•    A Residential Flat
•    A Plot with Defined Boundaries
•    An Independent House
•    A Non-Agricultural Land
One of the mandatory norms in order to get a government bank education loan is keeping in mind the amount required as a loan from the bank, this property value must exceed it.

Liquid Security:

Liquid assets as collateral are also accepted by the government banks to study in US.
Assets such as
•    Fixed Deposits
•    Government Bonds
•    Life Insurance Policies from Government-Approved Lenders

A Third-Party’s Assets:

This particular category of assets can be pledged as collateral if and only if the loan is availed through a Government Bank and nowhere else. These kinds of assets generally refer to applicant’s far away relations and not immediate family members like Friends, Uncle, Aunty, etc.
The conditions for pledging a third party asset are as follows.
•    Loan applicants who are not able to guarantee their personal assets as security
•    If the value of the decided asset is not serving the purpose of covering the required education loan amount


This was all about the types of collateral accepted by the financial institutions to sanction a secured loan to study in USA.


Keep following our page for more such informative articles on loan for higher education abroad.
See You Soon!

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