1) Education Loan
IBA scheme: Loans up to Rs.4 lakhs do not require security.
For loans of Rs.4 lakhs to Rs.7.5 lakhs, a third party guarantor is required. If the bank is satisfied with the net worth or means of parents, it may at its own discretion waive the need for a third party guarantor. The parents will be joint borrowers.
Loans above Rs.7.5 lakhs require tangible collateral of acceptable value, along with the assignment of the student’s future income towards repayment in installments.
Management Quota (Non IBA): Irrespective of loan amount, tangible collateral in the form of Land, Building, Govt. Securities, NSC, LIC Policies, KVP, etc. of acceptable value to the extent of 150% of the amount of the loan is needed, along with the assignment of the student’s future income towards repayment in instalments.
Premier Institutions, IIMs, IITs, etc.
For loans up to Rs10 lakhs, only the assignment of the future income of the student towards repayment in instalments is required.
Loans above Rs.10 lakhs require tangible security of value to the full amount of the loan, along with the assignment of the student’s future income towards repayment in installments.
International School of Business (ISB):
Only the assignment of the student’s future income towards repayment in instalments is required.
2) Education Loan for Vocational & Training Course:
Third party guarantee or collateral is not required. The parents must execute the loan jointly as co-borrower.