Education and Career Forum

Hi Sir/Madam, I just got the information about the EDUSUM Loan Scheme introduced by South Indian Bank. Can I know what security they want to give the loan under this scheme? Kindly let me know about the security immediately.

There are different types of security required for different types of loan amounts. Please find below the security required under South Indian Bank EDUSUM Loan Scheme.

1) No collateral is required for loans up to Rs. 1 lakh.

2) Loans of Rs. 1 lakh to Rs. 3 lakh require a third-party guarantee.

3) Loans beyond Rs. 3 lakh must have tangible collateral security that at least equals the loan amount.

4) Parents must submit a loan application on their child's behalf if the student is a minor. However, if the student has achieved the age of majority, parents must also be co-borrowers.

For various loan amounts, several types of security are needed. The security needed for the South Indian Bank EDUSUM Loan Program is mentioned below.

1. There is no need for collateral for loans under Rs. 1 lakh.
2. A third-party guarantee is necessary for loans between one lakh and three lakh rupees.
3. Collateral security that is at least equivalent to the loan amount is required for loans over Rs. 3 lakh.
4. If a student is a minor, their parents must apply for a loan on their behalf.

The South Indian Bank EDUSUM Loan Scheme is designed to provide financial assistance to eligible students who wish to pursue higher education in India or abroad. While the scheme does not have any specific security requirements, the bank may ask for collateral or a third-party guarantee depending on the loan amount and the borrower's creditworthiness.

Here are some general details about the security under the South Indian Bank EDUSUM Loan Scheme:

Collateral: For loan amounts above a certain threshold, the bank may ask for collateral in the form of property, fixed deposit, LIC policy, etc. The value of the collateral should be sufficient to cover the loan amount and any interest that may accrue during the repayment period.

Third-Party Guarantee: In some cases, the bank may also ask for a third-party guarantee from a person of repute, preferably a close relative of the borrower. The guarantor will be liable to repay the loan in case the borrower defaults.

Margin: The bank may also require the borrower to contribute a certain percentage of the total cost of education as margin money. This can vary depending on the loan amount, course of study, and other factors.

Credit Score: The bank will also evaluate the borrower's creditworthiness based on their credit score, income, employment status, and other factors. A good credit score can increase the chances of getting the loan approved without collateral or guarantor.

It is important to note that the security requirements may vary depending on the loan amount, course of study, and other factors. Therefore, it is advisable to check with the bank for specific details about the security requirements under the South Indian Bank EDUSUM Loan Scheme.