My daughter will be finishing her graduation in IT from a college in Hyderabad in May 2012 and is planning to go to Canada for further studies. Both I and my wife are working and have excellent credit rating. My daughter will require about `15 lakh. What are the formalities needed to be fulfilled? What kind of collateral guarantee is required? What could be the repayment period? Can the loan be repaid by the parents, if possible prepay it?

The bank will verify the enrollment of the student from the concerned institute. For a loan of Rs 15 lakh, you will have to submit a tangible collateral security of at least 100 per cent of the value of loan. For a smaller loan, a co-borrower or guarantor will be required. The co-borrower could be the applicant’s parents or guardians. The bank will run a credit check on the applicant and the co-borrower (guarantor) and his or her credit history before sanctioning the loan. While the parents or guardians are guarantors or co-borrowers, the student is a necessary borrower of the loan.

The bank will finance up to 85 per cent of the fee for overseas studies. The repayment will start one year after the completion of course or six months after getting a job, whichever is earlier. The maximum repayment term is seven years. Most banks do not charge any penalty for the foreclosure of loan.
PSU banks have a facility, where the interest amount accrued during course of period, is not charged. The entire accrued interest is added to the loan amount and the repayment is based on the aggregate amount. If you pay interest during the course period, then the rate of interest would be low. All the original documents relating to collateral security will remain with the bank and will be returned on the complete fulfillment of the loan. It is better to be a co-borrower rather than a guarantor as it will enable you to claim deduction for the interest amount (without any limit) under Section 80E.

I along with my family member have a Medi-claim policy from United India Insurance Co. Ltd. for almost 10 to 12 years without any claim yet. Recently, my policy was renewed and the new policy’s terms and conditions were changed from the previous one unilaterally — Ceiling of bed charges changed to one per cent in room and bed charges in ICU/CCU to two per cent of the sum insured. Please let me know, if it is possible for me to get the policy wording and terms and conditions changed as of the earlier outgoing policy.

As per IRDA regulations for policies issued after June 1, 2009, the terms and conditions of the renewed policies cannot be changed to the detriment of the policyholder. So check if the terms of policy that was operational on June 1, 2009, are changed without complying with IRDA guidelines. If it is so, you can file a complaint against the insurer at its website or send a complaint to the email address mentioned on the website. If the issue is not resolved within 30 days, you have two options:

1) You can file a grievance on www.igms.irda.gov.in
2) You can file a complaint with the insurance ombudsman. Details available on http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?page=PageNo23...

Harsh Roongta is the CEO of Apnapaisa.com. You can send in your queries to
movingmoney@deccanmail.com