Financing a child’s higher education is a significant milestone for parents. With rising tuition fees, especially for those pursuing studies abroad, finding a reliable solution to fund this dream is essential. A child’s education isn’t just an expense; it’s an investment in their future. However, the costs of tuition, accommodation, and other related expenses can strain even the most well-prepared families.
One practical way to bridge this financial gap is by leveraging a loan against property. This option provides a high loan amount and flexible repayment options, making it a secure way to meet financial needs without depleting savings or incurring high-interest debt.
Can We Use a Business Loan Against Property for Higher Education?
Absolutely! A business loan against property allows parents to use their property as collateral to secure funds for tuition fees, accommodation, and other education-related expenses. Whether your child wants to pursue a master’s program abroad or study in the country, this is a good way to ensure they get the best education without depleting your savings.
By pledging residential or commercial property, parents can borrow a significant sum based on the market value of the property. Many lenders today offer customised loans with flexible repayment terms, making them an ideal choice for funding higher education.
How to apply for a study loan on property?
The process of applying for a business loan against property for education is straightforward:
- Find a lender: Choose a bank or Non-Banking Financial Company (NBFC) that offers secured loans. Compare their terms, interest rates, and additional charges.
- Assess your property value: The loan amount depends on the property’s market value, so get an appraisal done to know how much you can borrow.
- Submit the necessary documents: These typically include property papers, income proof, identification, and details of the education course.
- Apply for the loan: Fill out the application form and submit the required documents.
- Approval and disbursement: Once approved, the lender will disburse the loan directly to you or the educational institution.
Repaying an Education Business Loan Against Property
Consideration of repayment terms is an essential part of borrowing a loan. Loans against property usually have long tenures, often up to 15-20 years, making repayment manageable. Many lenders offer flexible repayment options that allow parents to choose plans based on their financial capability.
Moreover, the interest rates for business loans against property are generally lower than unsecured loans, helping reduce the financial obligation. To minimise the debt, parents can also use bonuses or other windfalls to prepay part of the loan and lower the burden.
Conclusion
A loan against property is a secure and affordable way to fund your child’s education. By pledging your house or other properties, you can ensure they pursue their dreams without financial hurdles. With proper advice and planning, this option can provide the needed support to finance education, whether in the country or abroad.
Start exploring this solution today and take the time to find the best lender for your needs. Investing in your child’s future is the best decision you can make.
FAQs
What are the interest rates for an education loan against property?
The loan interest rates for an education loan against property vary based on the lender and property type. They are generally lower compared to unsecured loans, making them a good choice for funding higher education.
Can I get an education loan on a property if I already have an active home loan?
Yes, it’s possible. Lenders evaluate the property’s market value and repayment capacity to determine whether you can borrow against the same property.
What is the maximum tenure for repaying an education loan against property?
The repayment tenure can extend up to 20 years, depending on the lender’s terms, allowing for affordable monthly instalments.
