Know How To Get An Education Loan Against Property & Primary Factors Affecting It
According to reports by the Ministry of External Affairs, 5.86 Lakh Indian students are studying abroad in 86 different countries across the world. As of March 2019, around 2.5 Lakh Indian students have availed education loan to fund their studies, be it overseas or higher education in India.
With an increase in financial requirements for higher education, understanding the loan product, how to avail it and factors affecting it have become crucial for any student considering such an advance.
What Is A Loan For Education?
Before students start considering how to get an education loan, it is important they understand the financial product itself. An education loan offers financial aid to students in case they cannot fund the overall expenditure of their academic courses. Numerous higher education courses within the country as well as abroad have become available to many Indian students thanks to the financial backing of such forms of credit.
Lenders usually offer 2 different types of advances, secured and unsecured loans. Secured credits like a loan against property for education disburse substantial sums as loan amounts since the borrower mortgages property as collateral. It can help individuals cater to all the expenses related to their higher studies.
Eligibility For Education Loan
After understanding the details of what is education loan against property, students must understand the eligibility requirement to avail such a credit. Eligibility criteria are split into two divisions depending on the income source of the individuals applying for an education loan for their children.
For salaried borrowers –
- Age must be between 33 and 55 years.
- Must be working at a Government, public or private organization.
For self-employed individuals –
- The age limit is between 25 to 77 years.
- Self-employed individuals should be a regular source of income.
Documents Required To Avail An Education Loan
Once an individual fulfills the eligibility criteria, they have to consider what they need to do to apply for a loan against property for education and must arrange the required documents accordingly. These documents required, split on the basis of income source, are one of the most vital aspects answering how to get education loan against property.
Common documents –
- Aadhaar card/ PAN card.
- Residential address proof.
- Copies of all documents of the property that is to be mortgaged.
For salaried customers –
- Latest salary slips.
- Latest quarter’s bank account statement.
- Income Tax returns.
For self-employed individuals –
- Previous 6 months’ bank account statement.
How To Choose An Education Loan?
After understanding what is an education loan, there are numerous factors which affect the choice of an education loan. From basic features to additional benefits and personalized features for educational needs, students opting for a loan must check the below-mentioned aspects.
- High Loan Amount – One of the most crucial things to know before applying for a loan against property for education is its large disbursed sum. Generally, financial institutions offer a large amount of money that can go up to Rs. 1 Crore for salaried borrowers. In the case of self-employed individuals, the sum can even reach up to Rs. 3.5 Crore.
- Convenient Repayment Tenors – Generally, NBFCs offer a tenor between 2 and 20 years for salaried customers while it comes down to 18 years for self-employed borrowers. The long repayment tenor helps pay-off the debt without straining one’s personal finances.
- Easy Application – NBFCs offer easy loan application along with fast disbursal within 4 days of application. Institutions bring you pre-approved offers that make availing education loans against property quick and easy. Such offers are available on numerous financial products including education loans, home loans, business loans, personal loans, etc. You can check your pre-approved offer by providing your name and phone number.
- Balance Transfer: This feature allows borrowers to easily transfer their remaining loan amount to a different financial institution to avail of lower rates of interest and additional benefits.
Most aspiring students in need of financial aid for their studies put their primary focus on how to get education loan. Additionally, another point of confusion is that of loan against property vs. education loan, which one is better.
Furthermore, students must begin by looking into details of how to choose the loan product. Most NBFCs and financial institutions offer easy eligibility and documentation requirements to streamline the entire process and help avail such credit with ease.