My query is to understand student loan before approaching an institution.
Student loan is needed for the education of my nephew.
- Is it always necessary to mortgage a property for student loan? Could you clarify with the help of some concrete examples?
If mortgage is necessary, I will have to mortgage my property because student's parents don't have any property to mortgage.
That's why some more questions as below.
- Will the loan be given to the student directly with him as first applicant (I am not sure if there is something like first applicant, second applicant etc. or not)?
- Will my name be added in the loan application or in a separate application? If not, how will I and/or my property be linked with the loan? Will I have to submit original papers of the property to the bank with some signed agreements? What will be the link between this agreement, if any, and the student loan?
Because it will be difficult to know at the time of application what the amount of first salary will be, how soon the student will/can be able to pay back the loan, etc. that's why few questions as below.
- From when will the loan repayments start, for example after the completion of studies, after the start of first job, etc.?
- When will the monthly installment amount be decided, for example already at the time of application, after the completion of studies, after the start of first job, etc.?
- When will the tenure for paying back the loan be decided, for example already at the time of application, after the completion of studies, after the start of first job, etc.?
- Can the start of installment payments be delayed (by agreement already at the time of application, or later), for example if the student wants to pursure some further studies after the completion of the studies for which loan was taken?
I would also like to understand the risk for me because my property will be mortgaged.
- Can the student escape easily from paying back the loan by simply saying No (refusing) to the bank for paying back the loan even if he has a job?
- Will the bank have to try every possibility to recover the money from him or his parents before using my property to recover the loan? What are those possibilities?
- Is the bank obliged to try all possible options including legal route (court cases) against the student and/or his parents before using my property to recover the loan?
- Will the bank need court's permission before using my property to recover the loan?
- What can be my point of defence taking into account that I may not have easy and direct access to records related to student's job or salary to prove that he is in a position to pay back the loan but he is not paying? Or I won't be able to keep my property if student simply doesn't pay back the loan?
Thank you.
