Student education, both in India and abroad, is only getting more expensive with every passing year. Fees have multiplied by up to 4.5 times in the past 20 years. Considering the rise in tuition fees and other expenses like the cost of living, it may take 3 times of your entire savings to meet these expenses when sending your child for education overseas.
Funding your child’s higher education in India is only possible with the help of education loan on property for higher education which customised to meet educational expenses. These loans have gained popularity in the past few years because of their affordability and ease of repayment.
Nevertheless, despite these loans becoming the go-to option to finance your child’s higher education, a few things remain to be checked when availing an education loan.
Factors To Check When Availing Loan Against Property For Education:
- Applicable Rates Of Interest
Funding student education with a loan against property are an affordable option as interest rates are usually attractive on such secured loans. However, it is advisable to check the interest rates offered by different lenders so that you may opt for the lowest rate of interest.
Also, make sure to check the type of interest being charged. Since a study loan against a property usually comes with a long tenor, opting for a fixed interest rate over floating rate will be affordable. However, compare the current lending rates and the market forecast before making a choice.
2. Other Fees And Charges Involved
Apart from rate of interest, the total cost you need to pay to avail a loan also includes various fees and other charges that may increase the total cost. They include the following –
- Processing fees
- Penal interest
- Foreclosure charges
- Part-prepayment charges
- EMI check bounce charges
Make sure to understand the charges on your loan against property beforehand so that you don’t end up paying more than the initial assessment.
3. Property Type To Be Mortgaged
Since loan against property for education is availed by mortgaging a property, it is a wise idea to check various lenders’ policies and criteria regarding the type of mortgageable property. While both residential and commercial properties can be mortgaged, some lenders may have exceptions like non-acceptance of vacant or agricultural land as a mortgage. Knowing such exceptions may eliminate any hindrance while availing a loan for student education.
3. Application And Disbursal Process
The processing time required by a lender to sanction a loan against property for education may delay the sanction. Make sure to opt for lenders like Bajaj Finserv who offer hassle-free approval and disbursal of the loan amount within 5 to 6 days of approval. Also, know how to get a student loan and how loan against property is processed before applying.
Bajaj Finserv also provide pre-approved offers with such loans which make the process of availing finance quick and easy. These offers are available on several financial products such as secured loans like home loans, unsecured loans like personal loans and business loans, etc.
4. The Loan Amount You Are Eligible To Avail
Your eligibility for the available loan amount depends on the current market value of the property to be mortgaged and your lender’s policies regarding LTV. Loan to value or LTV is the ratio of the actual loan amount to the property’s market value.
Lenders like Bajaj Finserv offer a high LTV of up to 75% with loan against property for student education, provided you have a stable income to prove your repayment capabilities.
5. Flexibility of Repayment
The flexibility of repayment is essential to make the loan tenure convenient. Therefore, you must check the lender’s terms regarding repayment tenure. Some lenders offer flexible repayment tenure between 2 to 20 years. Choose the tenure that makes EMI payment affordable with the use of an education loan calculator that estimates your monthly outflow.
You may also opt for the Flexi Loan facility offered by lenders like Bajaj Finserv which lets you withdraw funds from a pre-sanctioned loan whenever required and pay interest only that sum.
Checking these essential factors will ensure you get the most affordable loan against property for student education with the best features. Meet all expenses related to your child’s education with this corpus and repay in easy EMIs over a long period.