Studying abroad is a dream for a majority of Indian students after completing their school education. Most of the top universities in the world are scattered across the Americas and the European continent, and even in China and Australia. Also if a student is selected for these universities, the high expenses associated with studying abroad often deter them from pursuing it.
According to data published by the Reserve Bank of India, the cost of tuition and accommodation for international students has grown by 44% between 2013 and 2018. Education loan for abroad studies is a viable financing option for Indian international students. More and more students are taking this recourse in recent times as financial experts term it a better way to finance an education abroad. As of March 2018, there are 2.79 million active loans for education in India. As things stood at the end of FY18, the average size of such loans is Rs. 7.08 Lakh.
If you are one of the 3 Lakh odd students who wish to study abroad, consider availing a loan against property for education. Know the following education loan details first. These will help you understand everything you need to know about loan against property.
It is a Secured Loan
Loan against property is a secured loan, meaning you need to mortgage property to avail the loan amount. Availing an education loan against property requires a transfer of the interest of the property from you to the lending institution, which in simpler terms is known as a mortgage. Once you have repaid the entire credit, the property’s complete ownership is transferred back to you.
There are several aspects of a secured loan which make it a better option for the lender as well as the borrower. As your property will be as a guarantee, the lender minimizes their risk. The borrower, on his part, can avail these loans at a lower interest rate and with a relatively low credit score.
You can use it for any purpose
From paying tuition fees to room rent or utility bills, these loans can be used for any purpose you deem fit. There are no end usage restrictions levied by the lender on how you can utilize it.
You have to meet the Eligibility Criteria first
Every financial institution levies a set of eligibility criteria that a prospective borrower must meet to avail of an education loan for abroad studies. Top lenders Bajaj Finserv offer such loans against minimal standards –
- You have to be a residing citizen of India.
- You must be employed in a formal private or private sector enterprise or own a business.
- Salaried individuals should be between 33 and 58 years old, whereas self-employed individuals have to be between 25 and 70 years of age.
You also have to submit a few documents such as salary slips, bank account statement, KYC documents, etc.
The amount you can avail depends on several factors
The highest allocated amount for a loan against property for education is Rs. 1 Crore and Rs. 3.5 Crore for salaried and self-employed individuals, respectively. However, the actual amount you are eligible for depends on many different factors like:
- Value of the property
- Your income
- Loan tenor
- Type of employment
Opt for the Right Lender
Almost every financial institution offers education loans against property, though the terms vary from one lender to another. You must choose a lender that offers the best terms as per your requirements.
Bajaj Finserv, for example, offers such loans at exceptional rates and with flexible tenors. They also bring you pre-approved offers which make the loan approval process time-friendly and straightforward. These offers are available on numerous financial products, including both secured advances like home loans and unsecured credits like personal loans.
To avail, the education loan for study, you must have to meet the eligibility criteria and have the documents ready. Affluent or not, every student must have the opportunity to study at an educational institution of their choice. Lack of funds should not be a reason to stop them from pursuing an education at the best institutes abroad.