Will my parents need to be co-borrowers, or must I pledge collateral, for an abroad education loan above INR 7.5 lakh?

For an education loan above INR 7.5 lakh, you will typically need to pledge an asset or property as security. Loans up to that amount usually need your parents or guardians as joint borrowers with a third-party guarantee. Rules differ by bank, so confirm the details with your lender.

Co-Borrower and Security Requirements by Loan Size

What to Expect During the Loan Process

• If you offer immovable property as security, a bank representative will usually inspect it and prepare a report on its mortgage ability.
• The bank will also assess the property you pledge.
• During the moratorium period, the borrower is typically not required to make payments to the bank.
• Banks often do not fund 100 per cent of the money needed for your education, so expect a loan margin you must cover yourself.

My Advice

Talk to your parents early about which asset could be offered as security, because the property inspection adds steps to the process. Compare at least two banks on their security rules and margin, and check the official bank page for the latest conditions before you apply.