Types of collateral accepted -
- Immovable assets - These can be real estate assets such as a land, house, flat, etc. It should be remembered here that agricultural land or land that falls under the jurisdiction of Gram Panchayat is not accepted as collateral by lenders. However, non-agricultural open land that has clear boundaries is accepted as collateral for secured education loans.
- Intangible assets - These are liquid securities such as fixed deposits, mutual funds, ULIPs, Life Insurance policies, Government Bonds, etc. The bank will keep the liquid securities such as FDs, However, the FD holder will continue to get any interest received on these intangible assets. Borrowers can pledge an old FD or even open a new FD for an education loan.
- Third-party secured education loan - This is a little-known type of collateral accepted by lenders and includes immovable assets of a third party (relative or friend).
Collateral documents required for an education loan
The list of documents will differ from lender to lender. Here is a general list of documents are required for an education loan with collateral -- Property Title Deed
- Registered Sale Agreement
- Original registration receipt for the above agreement
- Allotment Letter By Municipal Corporation / Authorised Govt. authority such as MHADA, CIDCO, HUDA, DDA, JDA, GIDC, etc
- Previous chain of sale deed establishing title
- Most recent property tax bill or most electricity bill having the same address
- Approved plan/map if the property being pledged is a built one
- Link documents, that prove the ownership history of the said property for the previous 30 years
- A latest property tax receipt
- Occupancy proof
This is a companion discussion topic for the original entry at https://www.gyandhan.com/blogs/collateral-security-for-education-loan