The Abroad Education Loan Procedure in India: Secured Loans

An abroad education loan is a sure shot way to ensure an unrestricted flow of funds for your higher education course abroad. 

A secured education loan in India is provided on the basis of collateral security. Collateral security basically refers to an asset which is pledged by the borrower to the lender as security for loan. The same concept is applied to education loans also. Secured education loans are mainly granted by prominent government banks in India. Banks such as the SBI, Bank of Baroda, the Punjab National Bank, etc. are some of the well-known lenders of collateral-based education loans. Since the government bank education loan process involves pledging of collateral security, the education loan procedure of the same is longer. The first step towards securing a collateral education loan is the application process.

The pre-visa disbursement hassle

The education loan disbursement process marks the end of the secured education loan procedure. Now, students who wish to study in countries like Canada, Germany, Australia and New Zealand are bound by rules to make a prepayment of their one year’s living expenses in order to qualify for their student visas. 

Education Loan Procedure: Repayment

• Moratorium period basically refers to a loan holiday which is granted to students before their repayment period begins. This advantage is only applicable to loans like an SBI education loan or a Bank of Baroda education loan.
• The concept of moratorium period was introduced by government banks after having given due consideration to the fact that students require sufficient time to find employment once their course period gets over. This feature of the secured education loan procedure is what attracts a majority of students. 
• The education loan repayment tenure granted for secured education loans is 15 years.

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