With the cost of education is rising at an alarming rate, education expenses are getting quite unbearable for Indian parents. Moreover, the cost is soaring for higher education abroad. For example, the average cost of a post-graduation degree in Britain can range somewhere between GBP 10, 000- 20, 000 annually.
Apart from tuition costs, miscellaneous expenses can be comfortably met with an education loan against property. Leading financiers extend such facilities for students to fund their education in India and abroad.
Overview of loan against property for education
In India, there are literally two types of credit facilities associated with education- education loan schemes extended by the Government and a loan against property for education. Due to the advancement of technology, intending borrowers can apply for this facility through different websites.
A loan against property is one such financial product extended by leading financial institutions against mortgaging a high-value asset. Being secured in nature, it does not come with any end-use restriction and can be used to finance borrowers’ business or personal requirements. For example, one can utilise the funds to finance his/her child’s higher education in any reputed institution of the country or overseas.
Besides academic cost, since an education loan on property can be utilised to finance accommodation costs, travel fare, food, etc., it is considered a beneficial option for aspiring students. This comprehensive financing option will ease students’ financial burden.
How LAP is an effective option for funding higher education?
Reputed financial institutions extend a loan against property for education, uniquely designed to fulfil one’s essential financial requirements. One can obtain a substantial amount by pledging his/her high-value asset as collateral at affordable interest rates. Besides, additional benefits associated with this facility include easy balance transfer, flexible repayment tenor and many more.
Although the sanctioned amount depends on the mortgaged property’s market value, with competitive interest rates, repaying EMIs are comparatively easier.
In case you are contemplating an education loan against property to finance your child’s higher education, following are the features of a LAP:
- High loan quantum and flexible tenor
Both salaried and self-employed applicants can avail high loan quantum at attractive interest rates. However, the amount will vary from salaried to self-employed and also depending on their income parameters.
Prospective borrowers can opt for a flexible tenor based on their repayment capacity. For a loan against property, tenor can range up to 20 years; however, it can vary for salaried and self-employed applicants.
- Easy and hassle-free disbursal
If individuals meet the lender specific eligibility parameters and submit necessary documents, they can receive their preferred loan amount within minimum time.
- Nominal documentation
Eligible borrowers can avail substantial credit from reputed financiers by producing minimal documentation, such as KYC, property details, income proof etc. This process gets more convenient with the advantage of doorstep document collection option.
- Loan refinancing
Individuals can transfer their outstanding education loans by opting for an affordable balance transfer facility and providing basic documentation for a considerable top-up loan benefit.
Besides, eligible borrowers can also benefit from pre-approved offers on various secured and unsecured financial products that simplify and accelerate loaning procedures. Existing customers can check their pre-approved offers online by mentioning their name and contact information.
Therefore, aspiring students can avail these benefits if they wish to apply for loan against property and finance their higher education without any worry. However, students belonging to a financially backward section of society who do not own any high-end property can fulfil their dream of completing higher education in India or abroad by applying for certain education loan subsidy schemes extended by the Government.
With the availability of various education loan schemes, such as Padho Pardesh scheme, Dr. Ambedkar Central Sector Subsidy Scheme, Vidya Lakshmi Education Loan scheme etc., financing child’s higher is more affordable and accessible. These schemes extend certain eligibility parameters, and the sanctioned amount will depend on the applicant’s annual family income.
Besides, few of these schemes ensure 100% interest reimbursement by the Government that has been paid during the moratorium period. However, these schemes come with a shorter tenor and strict eligibility parameters, making mortgage loans a viable option.
Therefore, while applying for an education loan against property, one must check the associated charges often levied on these credit facilities. Only after understanding the different credit facilities available in India, borrowers must make an informed decision to avoid any financial strain in the long run.