Security for Educational loan

Upto Rs 4 lacs	Co-obligation of parents. No security
Above Rs.4 lacs and upto Rs7.5 lakhs	Co-obligation of parents together with collateral security in the form of suitable third party guarantee. The bank may, at its discretion, in exceptional cases, waive third party guarantee if satisfied with the net-worth / means of parent/s who would be executing the document as “joint borrower”.
Above Rs.7.5 lakhs	Co-obligation of parents together with tangible collateral security of suitable value, along with the assignment of future income of the student for payment of installments

Note:-

The loan documents should be executed by both the student and the parent/ guardian as joint-borrower.
The security can be in the form of land/ building/ Govt. securities/ Public Sector Bonds/Units of UTI, NSC, KVP, life policy, gold, shares/mutual fund units/debentures, bank deposit in the name of student/ parent/ guardian or any other third party with suitable margin.
Wherever the land/ building is already mortgaged, the unencumbered portion can be taken as security on second charge basis provided it covers the required loan amount.
In case the loan is given for purchase of computer, the computer has to be hypothecated to the Bank.

Repayment:

Repayment holiday/ Moratorium: Course period + 1 year or 6 months after getting job, whichever is earlier.

The loan to be repaid in 5-7 years after commencement of repayment. If the student is not able to complete the course within the scheduled time, extension of time for completion of course may be permitted for a maximum period of 2 years. If the student is not able to complete the course for reasons beyond his control, sanctioning authority may at his discretion consider such extensions as may be deemed necessary to complete the course.

The accrued interest during the repayment holiday period to be added to the principal and repayment in Equated Monthly Installments (EMI) fixed.

1% interest concession may be provided for loanees if the interest is serviced during the study period when repayment holiday is specified for interest/ repayment under the scheme.