The cost of higher education in India is rising day by day. The higher education sector has a market worth of Rs. 708,000 Crore in 2017. The expenses are estimated to be double the current value by the end of 2025.
Such massive expenses can take away a considerable portion of the lifetime savings of an average Indian. Hence, education loan on the property is gaining popularity among individuals to fund such expenses.
There are a lot of financial institutions in the market, offering a wide range of financial products to help students fund the expenses to pursue their higher education. However, the following benefits will provide them with a brief idea on how to get a student loan with favorable terms.
Benefits Of Education Loan on Property
Loans against the property for education are gaining massive popularity among the borrowers. It ensures that the students can avail sufficient funds according to their requirements and repay it conveniently. Here is a list of benefits that a borrower can avail of a loan against property for higher education.
- High study Loan Amount
Financial institutions high amounts with a loan against property for education. The offered amount can range up to 75% of the mortgaged property’s value. It serves as an excellent tool as borrowers can fund all the required expenses with a single loan. Also, borrowers can avail a top-up amount on the existing loan in case of an urgent need.
- Low-interest Rate
Borrowers offer a lower interest rate on such loans compared to other forms of credit. The mortgaged property reduces the risk factor for the lenders, and they offer affordable interest rates on such credits. However, borrowers must take into account the factors that affect the interest rate for loan against property for education to avail the best interest rate for them.
- Flexible Repayment Facility
Leading lenders offer student education loans with additional repayment-friendly features. For instance, Bajaj Finserv offers their Flexi Loan facility with Loans Against Property for Education. This facility allows a borrower to withdraw a sum of funds from the pre-sanctioned loan amount and pay interest only on that amount. They do not need to pay interest on the total sanctioned loan. They can even optionally pay interest-only EMIs and repay the remaining principal at the end of the tenure.
- Extensive Tenure options
Loans against property for education come with extended tenure. Borrowers often consider how to get a student loan with a longer tenure to reduce the amount of EMI’s. Some financial institutions offer flexible tenure facility to help borrowers develop a repayment strategy depending on the financial burden on them.
Bajaj Finserv is one such NBFC that offers such credits with a flexible tenure ranging from 2 to 20 years. They also provide few other facilities including balance transfer, loan top-up, part prepayment, foreclosure and more.
They also provide pre-approved offers on such advances to simplify the process to avail them and to save you time. Pre-approved offers are valid on mortgaged credits like home loans, unsecured credits like business loans and personal loans along with a wide range of other financial products and services.
The eligibility criteria that borrowers must meet to avail an education loan against property are as follows –
- Applicants must be a resident of India.
- The age bracket for salaried and self-employed applicants is 33-58 years and 25-70 years, respectively.
- Applicants should be a salaried employee in an MNC, public sector, private sector or should be a self-employed individual with a regular source of income.
Here is a list of documents required to avail a loan against property for education.
- PAN/Aadhaar card
- Address proof
- Documents of the property to be mortgaged
- Bank account statements of the previous 3 months in case of salaried individuals and of 6 months in case of self-employed individuals.
- Latest salary slips (in case of salaried individuals).
- IT returns (in case of salaried individuals).
Now that you have a complete guideline about loan against property for education, you are ready to avail such credits to fund your expenses. But before applying for the loan must be sure you have all the proper documents required for education loan are available and ready. Also, make sure that you are aware of how to get a student loan with favorable terms to make the most of such credits.