Education loans: Do you need a guarantor?

Do you know how to get an education loan? Do you need guarantors for the same? How can you repay your education loan?

Why is it necessary to take an insurance during the tenure of the loan? Can you keep your mutual fund investments, your fixed deposits as collateral for getting an education loan?

In a chat with Get Ahead readers on August 23, education loan expert Harsh Roongta answered these and several other queries related to education loans.

Part I: Want an education loan for an international MBA?

Rahul asked, Hi Harsh, Does the US consulate consider everything only in liquid assets for funding of higher education or do they consider properties etc, as well ?

Harsh Roongta answers, The US consulate does not provide any funds for education in the US. The fund positions may possibly be seen to assess the visa application.

sandeep asked, i am working with Shringar cinemas ltd i want to do the company secretary course, so am i eligible for an education loan? if yes which bank gives it? how much? thanks.

Harsh Roongta answers, Any public sector bank will be able to give you education loan for this. But the fee amount payable for the course is not very high and hence the loan amount may not be very large.

srinath asked, hi, my brother went to New Zealand for his masters in medicine. he had to pledge our house to get a loan amount of Rs 13 lakhs in indian bank. he is still studying and he will start repaying the amount only after an year. i have finished my engineering and working now. im planning to go abroad to study . we don't have any other asset to pledge now. can't i get any loan for my education? should i wait till my brother finishes his repayment and remits the property? please answer.

Harsh Roongta answers, If the value of the house has gone up - which it should have - please check with the same bank whether they will be willing to give an additional loan against the same property.

sachin_h asked, Hello...I want to pursue an MBA from US/UK.. If i take a loan & something happens to me during the studies....wud the bank still recover the loan amount from my guarantors? Is there any insurance cover against the loan amount?

Harsh Roongta answers, Most banks will insist on you getting an insurance policy for the duration of the loan and also finance the one time premium amount for such an insurance policy. So your guarantors need not worry.

mamu asked, Dear Sir, What are the various tenures offered by banks for educational loans? What are the interest rates on such loans and can I avail of a fixed and or floating education loan rate?

Harsh Roongta answers, please see this link. http://www.apnaloan.com/education-loan-india/rates.html.

deepesh asked, Hello Sir, this is Deepesh from Mumbai. I had applied to the University of Leeds for MSE in Wireless Communications. I have been offered a place in Leeds. To fund my course we are taking about 80% of total expenses. Would that have a negative impact on getting the visa?

Harsh Roongta answers, I cannot give a definitive answer on Visa issues but i cannot see why this should have a negative impact.

Hemant asked, Hello Harsh Sir, I plan to do my MS in Fall 2008. For the collateral I don't have any house or property, however I have invested around Rs 5 lakhs in Mutual Funds, FDs and ULIPs put together. Can such financial instruments serve as collateral? And of what amount should the collateral be for a loan of say Rs 20 lakhs? What is the maximum amount of loan one can avail and which bank provides the same at least interest? Kindly clarify my queries. Thanks, Hemant.

Harsh Roongta answers, Financial securities can be a very good collateral though te quantum mentioned by you may not be enough for the amount of loan you are seeking.

NASEEM asked, I M NASEEM ANSARI WORKING AS PLANNING ENGINEER IN ITI LTD - PUNE. COMPLETED B.E. IN 2004 WITH 72%. NOW I M PLANNING FOR MBA FROM SITM - PUNE. MY QUESTION IS THIS HOW MUCH AMMOUNT I WILL GET ON DEGREE. IF IT IS NOT POSSIBLE, THEN WHT WILL BE OHTER SOURCES FOR LONE, PL ADVICE ME...
Harsh Roongta answers, You can get a loan of upto Rs. 4 lacs without any security for doing an MBA from an recognised institution.

samya asked, Sir, I would like to go to UK for further studies and going to apply for bank loan. Now will this loan be given on Tuition fees and living expense (of UK / London) or just on Tuition fees?

Harsh Roongta answers, Most banks will consider both but will need a defintive estimation of the living expenses. Data from the university website will be a good source for this information.

prasad asked, Dear Sir, I am working and doing my virtual (satellite) classes with IIMC. Am I eligible for an education loan? If yes, which bank gives it? Thanks in advance.-Prasad

Harsh Roongta answers, If it is an MBA course, yes.

Seshadri asked, PhD in PharmaChemistry in Griffith University : Which bank offers education loan? SBI, Chennai offered initially and withdrew after releasing first installment!

Harsh Roongta answers, What was the reason for the withdrawal?

sachin_h asked, For financial securities to be collateral, how wud the valuation be done for financial securities like equity, ULIPs?

Harsh Roongta answers, normally market value minus 50% margin for equity based financial securities.

Shekhat asked, Hello sir, I am doing 1 yr executive MBA & took Rs 7.5 lacs from OBC at 11.25%. Now after getting job I will b paying the loan & loan payment is exempted from Tax. So if I get a job of Rs 8 lacs per annum then should I pay all loan in one year or extend the period to enjoy tax benefits?

Harsh Roongta answers, It depends on what rate you have the education loan at. If your loan is at a rate of less than 11% than it may be advisable to conitnue the loan and invest your monies elsewhere as you may be able to obtain better post tax return. Otherwise it is better to pay off your education loan -- normally no prepayment fee is payable -- especially if you also separately have enough contingency money to takle care of emergencies.

Harsh Roongta says, Ok Folks. This was exteremely interesting. Plesae read the transcript as your kind of question may already have been answered. For any further queries you can logon to www.apnaloan.com and ask your queries on loanguru section.

Part I: Want an education loan for an international MBA?

Harsh Roongta is the CEO of apnaloan.com. It is a guide to education loans in India. Apnaloan also enables consumers get best education loan rates by making banks compete for their loan.