Types in which the Collateral security is accepted:

Most of the graduates can connect to what is going to be mentioned in the next few lines. Have you recently finished your graduation course? Or wish to study abroad for further education. Then here is a great solution to reach your dream educational institute.

The fees of institutes abroad are way higher than in India thus making us stick to India. How many of you know that there are companies called NBFCs other than banks? Who provides loans at much lower interest rates, unlike banks? But for obtaining loans with a higher amount.

One needs to have an asset to keep as collateral security. The Collateral Security is any personal asset that the co-borrower owns. The co-borrower is either the parents or the spouse if married.

There are 3 types of collateral security that banks accept. Them being:

1.Property (immovable)-

A house, flat, land, a bungalow is all accepted as security to the bank. An open ground with defined boundaries is also considered a verified asset of the borrower by the bank.

There are times when the property is not equal to the amount of the loan. This is known as collateral margin which is not usually accepted by banks.

2. Third-party as collateral-

One can offer the family or friends property as Collateral Security but banks do not easily accept this. They always need proof for them to be on the safer side. In this case, financial officers can help you.

3. Liquid securities:

Fixed deposits, life insurance policies (LIC) and other bonds or jewelry can be used as liquid security. They are the fastest source of converting the funds into money. One condition that is applicable here is that- the fixed deposit should be from the same bank that you have chosen to take the loan from.

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