Education Loan Against Property: A Detailed Overview

Yes, you can use the loan against property for higher education. This loan is offered to students who are going for higher education in India or overseas. LAP for higher education can be availed of for a part-time, full-time, or vocational course and bachelors or masters in the fields of management, engineering, hotel management, etc.

The major benefits of LAP for higher education are as follow:

• High Loan Amount - The maximum loan amount offered on a loan against property is mainly dependent on the current market value of the property mortgaged with the lender. Therefore, with the higher market value, students can avail themselves of a high loan amount for studies.
• Low-Interest Rates - As the loan against property is a secured loan, the interest rate charged on the LAP is lower. usually, the mortgage loan rates start at around 7.20% p.a. from public-sector banks in India. From private lenders, this interest rate would be on the higher side.
• Ideal Utilization of the Property - LAP helps in getting the real value of the property as a loan. Applicants can decide not to sell their property and still get sufficient money for their higher education and meet their requirements at reasonable rates of interest.
• Easy Documentation and Process -  The documentation process and approval system of loan against property for higher education are usually uncomplicated.
• Flexibility in Repayment Tenures - Applicants can take flexible loan repayment tenure in the loans against property. The maximum loan tenure can be up to 20 years.

Students can apply for a student loan on property by visiting the nearest bank branch or online. Applicants will be required to provide the required documents related to academic background, address identity, and property they will mortgage. In addition to this, they will be required to furnish the bank account statement of the co-applicant (if there is one). The lender will evaluate the repayment capacity of the applicant, and the current market value of the LAP based on which the loan amount will be sanctioned.

Read More About: Documents Required for Education Loan

Process for disbursal of an education loan against property is done in the following steps:

• Application - The applicant will have to fill the application form by giving all the relevant details.
• Processing - The lender will evaluate the repayment capacity and will put the application into the process. Based on the current market value of the property, repayment capacity, and co-applicant, the lender will approve or reject the application.
• Documentation - After the loan application approval, applicants will have to submit the required documents.
• Loan Sanction - The bank will then sanction the loan and provide the letter after verifying the documents.
• Property Evaluation - Your property’s current market value will be accessed by the relevant officials.
• Loan Disbursal - The lender will transfer the education loan amount after successful verification and approval.