India hosts one of the largest populations in the age bracket of 5 and 24 years that generates demand in the education sector. Despite government initiatives like National Accreditation Regulatory Authority Bill for Higher Education and the Foreign Educational Institutions Bill, there remains a lack of quality higher education in many states of India.
Considering the lack of enrollment opportunities at top higher education institutions, there has been a rising demand for a loan for higher education. Such advances provide one with the adequate credit amount required to financially cover diverse expenditures involved in pursuing higher studies. This may include living costs, tuition fees, college payments, etc. These loans for education purpose also come with multiple other borrower-friendly features like quick approval and disbursal of the credit amount.
However, availing an advance is a significant financial decision, and prospective borrowers need to compare the financial aid offered by various leading financial institutions and then settle upon one that caters to their requirements.
Additionally, remember to check out these crucial things before applying for an education in India.
The Loan Amount you are Eligible for
Availing a secured loan for education requires borrowers to mortgage an asset. The loan amount available depends on the net market price of the property. Based on this evaluation, lenders decide the Loan To Value percentage that they would provide to the individual. The LTV may go up to 75% of the property’s value.
Thus, before an individual approaches a reputed lender, it is imperative that he/she computes the loan amount required by them and checks their eligibility accordingly. They can then contact an NBFC who caters to their financial requirement and offers an attractive rate of interest to ease the repayment process.
EMIs that you Need to Pay
Each reputed lender takes into account the MCLR and keeps a specific spread before advancing a loan at a given rate of interest. In case of reputed financial institutions, the loan against property enables individuals to avail high-value loans for students over an extended tenure that may range from 2 to 18 or 20 years. Thus, it is preferable to approach a lender that offers lower rates of interest to facilitate affordable EMIs. With pocket-friendly EMI options and additional facilities like zero charges on part-prepayment, individuals can now conveniently pay off their outstanding amount.
Also, borrowers need to draw a comparison between the floating interest rates vs fixed interest rate and weigh in their benefits to choose one that caters to their specific requirements.
Read here : Tips to Ease your Loan Against Property EMIs
Required Eligibility Criteria
Borrowers seeking a high-value loan amount can approach reputed NBFCs like Bajaj Finserv that offer Loan Against Property for Education. Such advances come with a flexible tenure, quick disbursal of the sanctioned amount, and easy accessibility of the loan account via a customer portal. Additionally, considering that lenders already have the reassurance of repayment due to the mortgaged asset, they are less stringent about the minimum eligibility criteria that prospective borrowers need to meet.
Such reputed lenders require their potential borrowers to be –
1) 33 to 58 (salaried), 25 to 70 (self-employed) years of age.
2) Indian citizen and reside in any one of the lender-specified cities.
3) Self-employed with a regular source of income, or a salaried employee working in an MNC, private or public company.
Meeting the above-mentioned list of nominal eligibility criteria helps them access multiple beneficial features like –
1) Easy balance transfer facility.
2) High loan amount of up to Rs. 1 Crore for salaried borrowers, and Rs. 3.5 Crore for self-employed individuals.
Documentation to be Furnished
Leading financial institutions to keep the convenience of the potential borrower as the priority and hence require the furnishing of nominal documents like the ones mentioned below to avail loans for students –
Latest salary slip, IT returns
2. Bank account statement of the last 3 (salaried) or 6 (self-employed) months.
3. KYC documents
4. Address proof
5. Copy of the documents for the property to be mortgaged.
Make sure to look into the required education loan details before settling upon one. Also, compute the EMI that you need to pay using the education loan calculator, and look into how a loan against property is processed. All that you need to do is provide a few basic details like loan amount, tenure, and rate of interest.