Educational loans have become a support system for students who cannot afford studying abroad or in the home country as for that matter, but have the awareness of the significance of education. In order to assist such deserving students, RBI introduced the concept of study/education loans from banks that have also collaborated with universities/colleges to provide financial aid. According to RBI maximum study loan for education in domestic country is Rs.10 lakhs and for studying abroad, it is Rs.20 lakhs. Guidelines show that loan taken up to Rs.4 lakhs is allowed without collateral security and when the loan amount exceeds, there is rule to have collateral and a third party guarantee which is most cases is the parents of the student. Collateral is a necessary constraint for the banks to be on the safer side. If a long of bigger amount is taken without collateral that might turn out to be a loss for the bank, to avoid that loss, collateral for loan exceeding Rs.4 lakhs is required.
In only rare special cases, when the student is extraordinary and deserving, bank might consider exceeding his/her limit of study loan without collateral.
There are certain top banks which offer study loans by exceeding limit of loan without Security which can be considered by a student who is dealing with issues regarding collateral security. Some banks are:
|HDFC Bank||Domestic Education – Up to Rs.15 lakhs Foreign Education – Up to Rs.20 lakhs For loans up to Rs.7.5 lakhs no collateral is required|
|HSBC||Loan up to Rs.5 lakhs do not require collateral|
|State Bank of India (SBI)||Domestic Education – Up to Rs.15 lakhs Foreign Education – Up to Rs.20 lakhs For loans up to Rs.4 lakhs no collateral is required|
|Punjab and Sind Bank||Domestic Education – Up to Rs.15 lakhs Foreign Education – Up to Rs.20 lakhs For loans up to Rs.4 lakhs no collateral is required|
|IDBI Bank||Domestic Education – Up to Rs.15 lakhs Foreign Education – Up to Rs.20 lakhs For loans up to Rs.4 lakhs no collateral is required|
All of the above banks and other banks have almost similar financial aid criteria which is loan up to Rs.4-5 lakhs is without collateral and amount exceeding 4 lakhs up to Rs.7.5 lakhs is approved with collateral as third party guarantee and the amount exceeding that, is with collateral as property.
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