Many people who own property opt for secured education loans, instead of unsecured credit. With education loan on property, the loan principal is higher, allowing financing more expensive courses or even an education abroad without any monetary strain.
However, before applying for an education loan against property, you must understand the eligibility criteria and document requirements.
Are you eligible for an education loan on property?
Maintaining the following factors is essential to avail such credit from NBFCs in India.
- For salaried employees
- You must be between 33 years and 58 years of age.
- You must have a stable source of income.
- You must be employed at a reputed MNC, government or public organisation.
- You must be a citizen of India.
- Your credit score must be above 750 points.
- For self-employed individuals
- You must be aged between 25 years and 70 years at the time of loan against property application.
- You must have a regular income.
- Only residents of India can avail the said loan.
- An adequate CIBIL score is necessary for availing student loan in India.
Apart from the points mentioned above, individual NBFCs may require you to meet certain additional conditions. Consult the lender for a detailed list of eligibility criteria for the credit.
Some financial institutions, require fulfilling only minimum eligibility criteria for prospective applicants to apply for such a credit. They also provide pre-approved offers on loan against property, making it easier and faster to avail such credit. These offers are also available for other secured and unsecured loans, like personal loans, home loans and more. You can check your pre-approved offers by providing your name and phone number.
Documents necessary for the loan
Your loan application is incomplete without the proper document submission. Listed below are some of the major documents that you should keep handy when looking for a study loan.
- Proof of income
For salaried employees, salary slips and Income Tax returns act as income proof. On the other hand, self-employed individuals need to provide detailed bank statements to show their income to the lender.
- Identity proof
Your Aadhaar Card, PAN Card, Voter ID, Ration Card, Passport, etc. act as identity proof. Photocopies of one or more of these documents are necessary to avail education loan on property.
- Proof of address
At the time of loan application, you must provide proof of your residential address as well. Photocopies of Voter ID Card, Aadhaar Card, Passport and others can fulfil this requirement.
- Property papers
NBFCs allow you to avail education loans against your house or apartment. Therefore, you need to provide the original property papers at the time of availing credit. These papers must include property registration, tax and other documents, as specified by your lender.
- Bank statements
Salaried employees need to submit the bank statement for the preceding three months, while self-employed individuals should provide statements for the preceding six months.
Additional documents may be necessary at the time of application for a student loan in India. Enquire about the same with your lender for accurate assessment of documents.
Benefits of availing a loan against property for education
Education in India and abroad is costly. Under such a circumstance, the limited principal offered by ordinary education loans is not sufficient to cover the expenses related to the course. You should compare the pros and cons of loan against property vs. education loan, before choosing one. Listed below are some advantages of LAPs for education.
- You can avail substantial loan amounts, based on the loan to value ratio of your property. Salaried employees can receive a loan of up to Rs. 1 Crore, while eligible self-employed individuals can avail loans of up to Rs. 3.5 Crore.
- Longer repayment tenor when compared to unsecured loans. You can choose from a range of flexible options, with a maximum tenor of up to 20 years. A longer repayment duration reduces financial stress on borrowers.
- Education loan on property has no end-use restrictions. Therefore, you are free to use the funds any way you please. After financing your child’s education, if some money remains, you can use it for other purposes.
Therefore, apply for a loan against property for education today to avail all of these benefits. It can help you fulfil your child’s education, ensuring a successful career for them.