What is Collateral Security for Educational Loan?
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Banks and NBFCs offer Education loans on collateral security. It means you need to pledge any asset which is equally valuable to the amount of the loan. This asset can be a property, fixed deposit, or other valuable possession. Such kinds of student loans are known as secured education loans. If the primary collateral security does not cover the total loan amount, banks may ask you for additional security.
Students avoid taking education loans that require collateral security due to concerns about the hidden terms and conditions of banks. However, with thorough research, a student loan from any bank is a good option for financing their studies. In this blog, we will help you to understand every piece of information regarding collateral security for educational loans.
Also, Read
| Indian Banks Offering Education Loans for Studying Abroad | Vidyalakshmi Education Loan |
| Public v/s Private Education Loan Providers | Education Loan Calculator |
Note: Do not let finances become a hurdle in your dream of studying abroad. Students, who wish to study abroad, may get in touch with the leading education loan providers through Shiksha Study Abroad.
What is an Education Loan?
A kind of financial aid, an education loan is required by students who wish to study domestically or abroad and requires the funding of their educational costs. Expenses covered include tuition fees, cost of living, books, and other related expenditures. These are a form of student loans which can be obtained from banks, and government organisations.
As a student, you would be the borrower who wishes to obtain some financial help for pursuing your education abroad. Apart from you your parents or guardians can also apply for a loan. Various types of education loans exist such as private loans and federal loans. An interest rate applies to the education loan which acts as the cost of borrowing money.
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Why is Collateral Required for Education Loans?
Collateral or collateral security for an education loan is required to reduce the risk involved in paying off the credit. Since all students don't get jobs immediately after graduating, the banks have no guarantee of their future income and profile. That is why collateral is required.
It should also be noted that third-party collateral is also considered by the banks for education loans, which implies that one can also obtain the same on the collateral of his or her friend or family member who is willing to pledge his or his asset for your loan.
While doing the risk assessment, the bank considers multiple financial and demographic variables. Every student has a different profile that needs to be fulfilled accordingly, and the bank offers the best collateral options to them based on their requirements and profile.
Property Papers Needed for Education Loans
- Registered Sale Agreement or Will
- Allotment Letter by Municipal Corporation
- Property Title Deed
- Registration Receipt
- Municipality approved the building plan's copy
- Present property tax bill as well as electricity bill sharing the common address
- 30 years link document or EC
- A conversion document will be needed if the agricultural land has turned into a residential
Collateral Security for Education Loan
The following types of collateral can be used by the borrower in order to obtain an education loan:
- Immovable Assets: Also called real estate, immovable property or asset includes land, apartment, plot, etc., which cannot be moved to any other location. It possesses the ownership’s right to it.
- Intangible Property: Those assets that do not have a physical form or presence but possess a value because of the legitimate or intellectual characteristics associated with them are called intangible properties. Examples of intangible property are mutual funds, government bonds, employment contracts, licensing agreements, etc.
- Third-Party Secured Education Loan: In here, a third party such as a parent, relative or a family member of the student will provide collateral to the one providing the loan. That collateral will assure the lender that the loan’s repayment will be done in case the student fails to pay the same later on.
Know More About Loans:
- Collateral for Education Loan: Everything You Need to Know
- Eligibility Criteria for Education Loan
- The A to Z of Study Abroad Loans
That's all about the topic. We hope that you have got all the information related to this topic. Contact India’s leading education loan providers through Shiksha Study Abroad For more queries. Do write to us in the comments below. Or request a call back from our Shiksha Study Abroad Counselling Services.
Q: Â Is MIT costly for Indians?
Q: Â What GPA is needed to go to Ohio State?
There is no minimum GPA score for UG admission at Ohio State. However, International students must have a cumulative GPA of at least 3.0 (on a 4.0 scale or equivalent) for graduate admission. Applicants may submit a standardized test score (GRE or GMAT) if their cumulative GPA is below 3.0 for the last degree.
Q: Â What GPA is required for the University of South Dakota?
The University of South Dakota expects a GPA score of 2.5 from undergraduates and 3 from postgraduates on the 4-pointer scale. Along with the GPA scores, undergraduates must meet the basic eligibility and submit an ACT score of 21 or higher and an SAT score of 1070 or higher. In addition, they must submit the required documents, such as academic history, transcripts, letters of recommendation, English language scores, and more.
Q: Â What are the requirements for admission into Purdue?
Purdue University application must have the following components:
Undergraduate Admissions
- The application itself
- Purdue-specific questions from the application
- Self-reported high-school grades
- Self-reported SAT or ACT scores (if applicable)
- Application fee
Steps to apply for Purdue University Undergraduate Courses
- First of all, complete and submit a Common application as per the Purdue University application deadlines
- Make sure that Purdue University receives all material required to complete the application
Graduate Admissions Steps
- Firstly, check Purdue University entry requirements
- Then, create an application account to start the application
- Choose the campus and course as per the preference
- Then, submit the results of the tests needed for the graduate program
- Prepare the additional documents based on the graduate program
- Lastly, pay the non-refundable application fee to submit the application. Purdue University graduate application fee is USD 75 for international applicants
Q: Â What is the CGPA requirement for Prince Edward Island?
International students must meet the general undergraduate admission requirements to study at Prince Edward Island. Applicants must have a minimum cumulative grade point average (CGPA) of 1.7 in the major subject requirements for Prince Edward Island University admission.
Read about the Canada Grading System
Q: Â How much is the application fee for Selkirk College Canada for international students?
Selkirk College Canada expects a non-refundable application fee from international students, which is USD 100 (INR 8K). International students must fill out the application form where they must upload documents like transcripts, test scores, passport ID page, resume, and more. At the end of the application, international students can expect to pay the application fee, and once their application meets eligibility, they get an offer of acceptance.
Q: Â Is Cambrian College in Canada a good option for international students?
Cambrian College in Canada is largely recognised as a prestigious institution, making it an attractive option for overseas students. The college provides a wide choice of programmes, and its accreditation guarantees respect to academic standards. Prospective students should carefully assess Cambrian College's suitability in terms of individual programme offers, campus facilities, location, and foreign student support services. The total cost of education, including tuition and living expenses, should also be considered, as well as any available financial help or scholarships. For the most up-to-date and accurate information, check Cambrian College's official website, contact international student services, and speak with current or former international students for firsthand experiences.
Q: Â Which is better, UIC (University of Illinois Chicago) or NIU (Northern Illinois University)?
As per an unofficial source, the University of Illinois Chicago ranked at #80 among national universities which is better than the NIU ranking at #273 position. The UIC is also exceeding in terms of graduation rates and easier selection than NIU. However, the tuition cost is more affordable at Northern Illinois University as compared to UIC. Students can get more clarity from the comparison table given below:
Particulars | University of Illinois Chicago | Northern Illinois University |
|---|---|---|
US News National Rankings 2024 | #80 | #273 |
Acceptance Rate | 79% | 70% |
Graduation Rate | 40% | 33% |
Tuition Cost | UG: INR 22L-INR 49L PG: INR 13L-INR 37L | UG: INR 10L-INR 16.5L PG: INR 8L-INR 45L |
Student-faculty ratio | 17:1 | 14:1 |
Raj Vimal has experience of 7+ years in SEO Content Writing, which includes 5+ years in the Ed-Tech industry. He has written articles about studying abroad, especially in the USA, UK, and other English-speaking coun... Read Full Bio
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MIT is not costly for Indian students. Applicants can study BTech program at affordable tuition fees as compared to other BTech colleges in the USA. The MIT BTech fees is around INR 50 L to INR 52 L.