What is accepted as collateral for education loan?

Collateral of suitable value is required for all education loans exceeding Rs. 7.5 Lakh. Tangible Assets – House, Apartment, Bungalow, Shop, Non-agricultural Land, Vehicle etc. Intangible Assets – Fixed Deposit, Life Insurance, Stocks etc.

Can a house on loan be used as collateral?

You can use your self-occupied residential or commercial property to borrow a loan. The property is used as collateral and the loan is disbursed by the lender as per the property value and your income to pay back the borrowed amount.

Is land accepted as collateral for education loan?

You can definitely use agricultural land as collateral for availing an education loan. If the value of the asset is at par with or exceeds the amount of the loan, then you can use it as collateral.

Can I put agricultural land as collateral for education loan?

Agricultural properties will be accepted as Collateral Security for Education loans, only in States where it is permitted to mortgage Agricultural Land for purpose other than Agricultural Activities.

Does student loan require collateral?

Get a loan easily Usually, collateral is not required for a loan up to Rs 7.5 lakh. In some cases, if you get admission into a reputed institution, say one of the IIMs, banks may not ask for collateral even for loans of higher amounts.

Can I use my home as collateral for a loan?

Don’t let anyone talk you into using your home as collateral to borrow money you may not be able to pay back. High interest rates and credit costs can make it very expensive to borrow money, even if you use your home as collateral. Not all loans or lenders (known as “creditors”) are created equal.

What are the disadvantages of using your home as collateral?

The obvious disadvantage of using your home as collateral is that your home is at risk. The bank can repossess your property and force a sale for less than what it is worth. They can then take legal action to collect the remaining amount of the debt from you.

What is collateral and how does it work?

Collateral is simply an asset, like a house, that you put up as insurance for a loan amount. If you default on your loan obligations, the bank or lending institution can then come along and take your home. It is a form of insurance against your default.

What are the early warning signs of using your home as collateral?

Early Warning Signs. Don’t let anyone talk you into using your home as collateral to borrow money you may not be able to pay back. High interest rates and credit costs can make it very expensive to borrow money, even if you use your home as collateral.