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Loan Against Property for Education

Education Loan on Property

Last Updated 20th Jun 2021

  • Loan Against Property for higher education is a secured loan availed against the property.
  • LAP for higher Education can be taken for a full-time, part-time or vocational course and graduation or post-graduation.
  • The rate for Loan against property for education starts from 7.20%.
  • The disbursal process of LAP for higher education is simple and hassle-free.
  • The loan amount is based on the market value of the property.
  • Loan against property for education helps in unlocking the hidden value of the property.
Apply for Loan Against Property @ 7.20%* Get upto ₹ 1,000* Cashback

Loan Against Property for Study Overview

Loan against property is a secured loan which is offered against a property mortgaged with the lender. The property can be owned land, a house, or any other commercial premises. The loan provided under LAP is decided based on the market value of the property. The property remains as collateral with the bank or financial institute until the entire loan against property amount is repaid.

Education Loan on Property for Higher Education

Loan against property can also be used for higher education. It is offered to students who are planning to study in India or pursue higher education overseas. LAP for higher Education can be taken for a full-time, part-time or vocational course and graduation or post-graduation in the fields of engineering, management, medical, hotel management, architecture, etc.

Features & Benefits of Loan Against Property for Education

Benefits of LAP for higher education are as follow:

  • Higher loan amount: The loan amount offered on LAP is mainly dependent on the market value of the property mortgaged with the bank. Thus, with the higher market value applicants can avail a higher loan amount for education.
  • Low-interest rates: As the LAP is a secured loan, the interest charged on the LAP is lower. Generally, the mortgage loan rates start at 7.20%.
  • Optimal utilisation of the property: Loan against property helps in unlocking the hidden value of the property. Customers can decide not to sell his property and still avail enough money for his higher education to meet his requirements at affordable rates of interest.
  • Simple documentation and approval process: The process of documentation and approval of LAP for higher education is generally straightforward when it comes to a loan against property.
  • Flexibility in loan tenures: Individuals can avail flexible loan repayment tenure. The loans repayment tenure can be as long as 20 years.

How to Apply for Student Loan on Property?

Individuals can apply for the student loan on property online or by visiting the nearest bank branch. Individuals will be required to furnish the necessary documents which include address proof Aadhaar/PAN card, Documents of the property he will mortgage. Additionally, he will be required to provide the bank account statement of the co-borrower (if there is one). The bank will assess the repayment capacity of the individual, and the market value of the LAP based on which the amount of the loan will be offered.

How Is Education Loan On Property Disbursed?

Procedure for disbursal of an education loan against property can be successfully completed in the following steps:

  • Filling Application Form – Applicant will be required to fill the application form by providing all the relevant details.
  • Processing – The Bank will assess the repayment capacity and will process the application. Based on the property, repayment capacity and co-borrower the bank will approve or reject the loan application.
  • Document submission – After the approval of the loan application, individuals will be required to submit the necessary documents which include identity proof, proof of residence, Bank statements of the co-borrower, the documents of the property and other relevant documents if any.
  • Sanctioning – The bank will then sanction the loan and provide the letter after verifying the documents.
  • Property evaluation – Representatives of the company will evaluate your property and assess its current market value.
  • Loan disbursal - The bank will transfer the education loan after successful verification and approval.

How Do I Repay My Education Loan On Property?

Individuals are required to repay their education loan on the property with EMIs as per the pre-specified tenure. Individuals can take advantage of facilities like part payment balance transfer or foreclosure to ease their study loan repayment and manage it more comfortably. Part-payment reduces EMIs or tenure. Whereas, Balance transfer enables you to switch banks to avail a lower rate of interest. And, foreclosure assists in repaying the loan in full before the tenure ends. Thus, it saves money on interest payment.

FAQs

Can I get an education loan if I have a home loan?

Banks provide loans based on the customer's repayment capacity. Banks will assess the repayment capacity, and if after paying the home loans EMIs, the borrower still can pay the new loan EMIs then the bank will provide the education loan. However, There can be a situation where the borrower's Home loan EMI is so high that any further will strain his monthly budget. In such a case, the bank will deny him the loan considering he won't be able to repay it.

What is the difference between student loan and education loan?

The difference between student loan and education loan are as following:

Basis of Distinction Personal Loan Education Loan
Purpose Used for a variety of purposes like education, tuition fees and accommodation. Used to fund higher education.
Disbursement Funds are deposited into the individual’s bank account. Funds get deposited to your school/college account.
Moratorium period Starts after the first month. It varies from 6 months to 12 months of completing studies.
Tax benefits Not available. Tax benefits are available.

Can I Use Loan Against Property for Higher Education?

Yes, an individual can also use the loan against property for higher education. It has multiple benefits.

  • The higher loan amount can be availed against the loan against property.
  • As the LAP is secured loan, the rate of interest charged against LAP is generally lower than the personal loan
  • The tenures under LAP are flexible.
  • Helps in unlocking the hidden value of the property.

What is the Interest Rate of Education Loan on Property?

The interest rate of education loan on property starts at 7.20%.


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