What is Collateral Guarantee?
For loans of higher amount, banks require the loan to be guaranteed by Collateral such as land, property, Fixed Deposit Certificate etc. This is required by banks to ensure that in case the borrower defaults on the loan, there is some guarantee given against the loan.. It must be understood, that the process can take a long time if appropriate documents are not submitted in time. Also, banks have to check title deeds of the collateral provided. In many cases, there are independent specialist agencies who work on behalf of banks and independently submit the report to the bank about the valuation of the given collateral. Its, therefore, suggested that the education loan application process must be started well in advance.
