Higher education in India involves considerable cost, severely restricting affordability. Therefore, education loans offered by NBFCs serve as a major form of assistance for bright young minds lacking the necessary financial backing. A select few lenders also allow students to avail education loan on property, enhancing the benefits of such credits.
However, before availing such loans, ensure you have the necessary documents ready. Failing to provide these papers can result in loan application rejection.
Which documents are compulsory for availing education loan in India?
Here is a list of documents that NBFCs demand when applying for an education loan.
- Identity proof – Applicants and co-applicants need to submit photocopies of their identity proof at the time of availing this credit. Aadhaar Card, PAN Card, Voter ID Card, Passport, etc. are some of the valid documents for this purpose.
- Proof of income – The co-applicant, generally the student’s guardian, must show valid proof of income. This may be in the form of salary slips, Income Tax returns or bank statements.
- ● Address proof – You need to provide proof regarding your current residential address. In some cases, the identity proof acts as residential proof as well. For instance, the Voter ID Card, Aadhaar Card, Passport, etc. contain your permanent residential address.
- Property papers – Those opting for a loan against property for education need to deposit their property deeds and papers during this credit application.
- Bank statements – Co-applicants who are self-employed must provide the bank statement of the last 6 months, while salaried employees can avail of a student loan in India with their bank statements for the preceding 3 months.
The list of documents can differ between various financing companies in India. Therefore, enquire about the same before opting for such a loan.
Next, you should look at the terms and conditions for education loans on the property. Make sure to read them thoroughly to better understand the loan.
Education loan terms and conditions
It is vital to assess what an education loan covers and what it does not. Here are some things that you should know about education loan against property.
- Education loan is only available to students pursuing their graduation or post-graduation degree. The credit is also available in the case of professional or technical courses.
- If a student is below 18 years, his or her parents or guardians can opt for the study loan in their stead. In such a case, the parents are co-applicants for the credit.
- NBFCs only provide loans for select institutes and universities. Those pursuing their education from unrecognized universities cannot avail of education loans against property.
- If you have an account with a particular financing company, availing an education loan from the same organization is easier.
- An Education loan covers the cost of the course, hostel fees, computer fees, as well as the library fees. For overseas education, the loan can also cover the expense of travel.
Advantages of opting for an education loan on the property
Normal study loans do not require you to pledge collateral against the principal sum. However, such unsecured loans offer very limited sums of money, which is often insufficient especially when pursuing education abroad. Moreover, unsecured credit comes with higher interest rates and shorter repayment tenor.
A loan against property is a better way to finance your kid’s education. Here are some benefits of this option that makes it the superior choice.
- Education in India and abroad is expensive. Loan against property allows you to avail substantial credit, matching the market price of the property in question. Most lenders today offer up to Rs. 1 Crore as LAP to salaried employees. Self-employed individuals, on the other hand, can borrow an even greater sum.
- Loan against property offers flexible tenor options for repayment, ranging from a few months to 20 years.
- Secured loans like LAPs are easier to avail with relaxed documentation and eligibility criteria. Therefore, you can rest assured that the financing company will approve your application if the property papers are in order.
There are several lenders that offer such credits in India. Companies like Bajaj Finserv even provide pre-approved offers on LAPs to make availing such credit easier and faster. These offers are also available across a range of secured and unsecured loans, including home loans, personal loans, education loans and much more. You can check your pre-approved offers by sharing your name and phone number online.