Education and Career Forum

Hi Sir,
I will be applying for an Educational Loan. I have heard that except SBI, some Banks ask for Collateral securities even for Loans upto Rs. 4 Lacs even though this is against the Financial Ministry's directives. Is it true?

The Education loan aims at providing financial support to meritorious students for pursuing higher studies in India or Abroad. As you have asked above, not only SBI Bank most of the Banks were providing the education loan with out collateral security up to 4 lacs. The Banks like Indian Bank, BOI Bank, United Bank, etc were not asking security for the loan up to 4 lacs. These banks were demanding security only above 4 lacs to 7.5 lacs. But only the Reserve Bank of India was demanding the collateral security or guarantee of third person for 100% of loan amount.

No, the banks do not demand for collateral securities against Education loan upto 4 lakhs. If they ask, legal action can be taken against them. However, make sure that you approach a bank which is under Government of India certification and regulation. Otherwise there are many small scale private banks run by various individuals which charge such collateral securities against loan of 4 lakhs.

Originally Posted by Unregistered

Hi Sir,
I will be applying for an Educational Loan. I have heard that except SBI, some Banks ask for Collateral securities even for Loans upto Rs. 4 Lacs even though this is against the Financial Ministry's directives. Is it true?

-w3

No, that particular thing is not called as a collateral now a days, it is called a Guarantee Amount that you have to pay for loan so that, in future you make any delay or something like that, then your Loan interest amount will be deducted from the guaranteed amount or property you kept reserved to the Bank. Since, SBI is totally dependent on the Government Source and it is very Government Bank, therefore it won't ask you but then also you have to pay the Guarantee amount to the SBI Also.

You can get education loan up to 4 lakhs from any any bank, without showing any collateral security. And there is no need to provide any type of security to get education loan up to 4 lakhs. So, you can apply for education loan up to 4 lakhs without showing any security. So, I suggest you to apply for education loan at any government bank, because you can get educatio loan easily and also with low interest.