Secured Education Loan

When collateral is needed, what is accepted, value required and how it lowers your rate.

Updated 30 September 2026 · 8 lenders tracked

Lowest education loan rate

6.75%

Union Bank Education Loan

What you need to know

Above ₹7.5 lakh (outside premier-institute schemes), banks need tangible collateral of suitable value plus an assignment of the student’s future income. A secured loan typically gets a lower rate and a larger amount, which matters for study abroad.

Accepted collateral

Security	Notes
Residential house or flat	Most common; must have clear title
Non-agricultural land / plot	Accepted by many banks after valuation
Fixed deposits	Lien marked in the bank’s favour
LIC / insurance policies	Assigned at surrender value
Government securities, NSC, KVP	Pledged or assigned

Pros and cons

Advantages

Lower rate (e.g. SBI 9.40% secured vs 9.90% unsecured)
Higher loan amount for study abroad
Bank of Baroda gives 0.20% off for 100% security (premier)

Limitations

Valuation, legal and mortgage costs
Takes longer to process
Property is at risk if the loan is not repaid

Property check

Title in the name of the student, parent or close relative (who joins as co-borrower/guarantor)
No existing mortgage, or a clear no-objection from the existing lender
Market value comfortably above the loan — banks apply their own margin on security
Approved plan and up-to-date property tax

Frequently asked questions

Can a property already mortgaged for a home loan be used?

Generally only if the same bank holds both loans and the property has enough value; otherwise it must be free of charges.

For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.