@12%

There goes another employee saying same tiresome statement "You need not pay any principal during your time @college, just serving the simple interest during this time will be enough". Oh Yeah .... its bloody easy to cough up 20,000 INR each for the next 18 months. The gentleman at the next bank asked myriad of questions as to "Why MBA?" , "Why Now?" , "Why CANADA?" , "What about the employment prospects?", "What do you have to say about the current recession and layoffs in western countries?" . I bet he has an alternate career as an Admissions committee member. I move over to another bank a few KM away, on inquiring about the education loans the employee retorts "You maintain your salary accounts at different private banks and when the time comes for Education loan you come looking for Public sector banks. How can we give loan to new customers , Sir "; That point really hit me hard and now i repent for not maintaining an account at any of the public sector banks for the last 4 yrs. Love them or Hate em , you cannot wish away the PS banks. Educational loans are almost exclusively granted by PS Banks and for all the Quaterly results noise made by the private banks, they are not interested in giving educational loans. I have learnt my lesson , only time will tell if i get a second chance to redemption. Add to this the constant pressure from Parents , Relatives who keep asking you whether it is worth to invest so much money during the current recession.

If you were wondering wot the heck am i blabbering about, Its about my experiences with several banks while searching for Education loans. I have secured Admit for MBA from Queens University , Canada for the class starting May 2009. It is a 1 yr program. The total cost of the course is (65K CAD Fee + 15K CAD for 1 yr living expenses.). I haven't got the Loan yet.

I found this useful link comparing education loan interest rates offered by different banks.
www.ecompare.co.in/loan/education-loans-interest-rates-india.cfm
Clearly Bank of India , Central bank of India are offering the most attractive terms with interest rates between 10 to 11%.

Also one important aspect of education loans is that the student needs to pay the simple interest while studying at the univ. To put it in perspective, if you are taking 20Lakhs loan for a 1yr course @12% PA, you need to pay 20K every month as interest even while studying at the school. After a maximum of 1yr after completion of course the EMI repayment will start.
I think it is ridiculous to expect the student to pay the interest while studying and it defeats the purpose of helping them with the education loan.

For ppl who want to keep their house as collatral securtity, please be aware of the below check list.

1. Seal deed

2. Link documents

3. EC for 30 years

4. Approved plan or lay out

5. latest tax paid receipts

6. 2 crossed cheques for legal openion and valuation
You need to be extra care full about point 2 and 4;
Some banks will ask you to produce link documents for the last 30 yr transactions. Few banks are not that strict about this point.

The real killer for me has been the point 4, Layout approval. I have realised quite late that the area where i live is not a govt approved layout. The banks are extremly reluctant to lend to properties which do not have layout approval. To explain it further. Under normal circumstances , the builder will submit a plan with all the plots and the space left for roads and other utilities. Once this is approved and stamped by the govt, the sale of land can go ahead and construction of houses can begin. The second step is for individuals to submit their building plans and get them approval of muncipal body. Lets see how this saga will end.