EDUCATION LOAN

I have just finished my MA in political science and want to do research from a foreign university, preferably in US, or UK. What is the procedure for taking a loan for my studies? Which banks should I approach? How do banks fix the modality for paying back the loan?
The willingness of a bank to give you an educational loan will depend on what they see as employment prospects for the course they are funding. The bank is well within its rights to deny a loan to this PhD course, after such an assessment. You will have to provide them adequate information so that the decision can be made in your favour.
For funding education, banks tend to prefer shorter duration courses, like an MBA with a campus placement, rather than longer tenure PhD courses. But you can still try your luck. Public sector banks give more education loans than private banks. If your university has high credentials, foreign banks could be interested. Several educational loans for large amounts require guarantees and collaterals, so check with the bank. Educational loans are repayable in instalments only after the borrower has begun to earn money to repay it. If you already have credentials and papers, the university will be willing to offer you fellowships to fund your studies. Most PhDs are funded by fellowships, grants for research and by tutorial earnings of the candidates. Explore these options before going for a loan.

ZERO BALANCE ACCOUNT

I had a zero balance salary bank account in my previous job. I quit that job three years back and did not operate the account after that. Recently, I got a mail from the bank saying it had debited money from my account because the account was switched from zero balance to a normal savings one and it did not have the minimum deposit for a savings account. What should I do?
The zero balance facility was linked to the fact that your employer held their accounts with the bank and, therefore, it was able to extend this facility to the employees. The facility ceases to exist when you are no longer an employee. Close the account if you do not need it or use it, or cannot maintain the required minimum balance.

You do not have any rights in this case because the facility offered to you was conditional upon your employment. Banks determine the minimum balance required based on their assessment of costs to keep and maintain an account and offer the facilities thereon. It is their business decision to fix this amount. You need to make your choice of the bank, based on your needs and abilities.;

COMMRCIAL LOAN

I want to take a bank loan to start a small grocery store. How will the bank decide the maximum amount it can give me? What can I furnish as security? I own a two-bedroom apartment. Can it be considered as security for the loan?
Banks are usually comfortable lending to an existing business, rather than funding start-ups. Some of them do have special schemes for small entrepreneurs, and may be willing to fund your venture.
The loan will be sanctioned after you have submitted a project plan, which describes the prospects for your business, and also has the information about your finances and net worth. Some banks are willing to fund up to Rs 15 lakh without collateral, provided you are able to bring in your own capital into the business. Banks usually do not offer mortgage-based loans for businesses, but the value of your home will add to your net worth and can increase your credit-worthiness. There is no standard set of practices when it comes to small business loans. Approach a bank that you are dealing with already since they know you and are familiar with your transactions.

LOAN FOR NGO

I run an NGO in Ahmedabad, which works for slum children. What are the requirements for taking a bank loan for my NGO?
Since your NGO is not involved in the activity of on-lending, you may not be able to obtain a bank loan for your activities. A bank loan is usually routed to activities that have the potential to generate cash flows, but have the constraint of mobilising a large amount of initial capital to lend in the first place. The ability of your NGO to borrow will, therefore, be limited. You may have to depend on donations to run your NGO. The Rashtriya Mahila Kosh (RMK) scheme does have some lending initiatives for education, but the procedures remain cumbersome. See http://www.rmk.nic.in/.

BAD SERVICE

I took a house loan last year. The property price are declining, will the bank recover the difference in price?

The loan amount is based on the borrower’s ability to repay, or the worth of the property, or both. Most loans are based on the borrower’s income. Fall in the value of property will be a loss to the borrower, not the bank. If the loan amount is linked to the property value, the bank will seek a revision of the terms. In either case, the bank will act on possible default from fall in prices. You should use your own funds to the extent of expected decline in value, and take the loan only for the rest.

ACCIDENT POLICY FOR ABROAD TREATMENT COVER

I lost my left leg in a car accident when I was 20 years old and took a health policy at the age of 26. I plan to get an artificial leg made for me from the US. Will my health policy cover the cost of this artificial limb and the cost of any repairs? Is there a rule that the cost of artificial limbs will be covered only if they are made in India?
As a general rule, all health insurance policies exclude the pre-existing diseases or any sort of physical handicap from the scope of coverage of the policy. Since you lost your leg six years before the commencement of your health insurance policy, unfortunately, the policy will neither cover the cost of the artificial limb nor the cost of any repairs. Mediclaim insurance policies, which are issued in India, are operative within the geographical territory of India. Therefore, in order to qualify for the claim (if coverage is established under the policy), the treatment must be taken in India itself.

I purchased a car recently. Should I take a motor insurance policy now, or wait for detariffing to get implemented fully? I have heard that premiums will come down after detariffing.
It is true that after the detariffing of motor premiums has taken place, the premium has started coming down because of competition in the market. But, in our opinion, once you have purchased the car, you must get it insured immediately. You may get a slight advantage in pricing by delaying buying of the insurance policy for your car, but at the same time you are running a very heavy risk by not insuring your vehicle, especially for third-party losses. In any case, third-party insurance is compulsory by law. Therefore, you must have at least that part of the cover if you are bringing the car on the road.