Security
Up to Rs.40.00 lakh for Category ‘A’: No collateral security or third-party guarantee to be taken, irrespective of the income / means of the guarantor.
FUp to Rs.150 lakh for Category ‘A’: Tangible collateral security of minimum value of 50% of total loan amount and interest accumulation during the course and moratorium period, acceptable to bank. Interest concession of 0.50% is available if collateral offered is 100% or more.
The property offered as security should be in the name of borrower / co-borrower or other immediate family members or any in the name of 3rd party; can be taken as security, property owner must join in as co-applicant or offer personal guarantee.
Residual age of the property must be more than 5 years of loan tenure.
The security can be in the form of building/Govt. Securities / Public Sector Bonds/ Units of UTI, NSC, KVP, life policy, gold, and bank deposits in the name of the student / parent / guardian/other immediate family members (mother/ brother/sister/ spouse) or any other tangible security acceptable to the bank with suitable margin.
In case of existing loan, other than mortgage loan, the value of the property as per banks approved valuer in excess of 150% of the loan outstanding (in the existing loan) can be considered towards collateral coverage of education loan.
In case of mortgage loan, the existing guidelines of 200% to continue.
In case the loan is given for creation of assets, e.g., purchase of computer / laptop the same is to be hypothecated to the bank.