Healthcare and education are the two sectors in India, which are continually becoming more and more expensive with the passing days. While a health insurance policy covers for expenses in the first case, you don’t have such options in case of the second.
Addressing educational expenses, especially if you are aiming to send your child to a renowned university in India or abroad, can be strenuous on your savings. Hence, opting for a student education loan is an ideal way to solve such financial crisis.
There are several loan options available in the market, each with features more attractive than the other. Such options can also confuse you in choosing the right one.
Which loan to go for?
We all know that Study loan for abroad is an exceptional product that provides all the features to make it affordable. These loans are secured – you have to mortgage an asset (house) to avail these. The loan amount you avail depends on the current market price of your property.
Why Are Loans Against Property Beneficial?
The primary reason why these loans are advantageous is their low rate of interest compared to unsecured or collateral-free loans.
Other lucrative features of these loans include:
- Financial Institutions Require Only A Few Documents
There is a small list of documents that you have to take care of when applying for a study loan, which includes:
- Copy of property documents you want to mortgage.
- Proof of address like any KYC document with your permanent address, property tax receipt, electricity bill, water bill, telephone bill, etc.
- Bank account statements for the last three months.
- Income tax returns (only for salaried applicants).
- Latest salary slips (only for salaried applicants).
Note that this list may differ with financial institutions. Some may ask you to submit even more documents. Applying with an NBFC reduces the hassle of producing extra documents.
- Avail Income Tax Benefits
You can avail income tax benefits on the interest paid on your loan against property for education under Section 80E.
- You Only Have To Satisfy The Age Requirement
The only eligibility criteria that you have to fulfill to avail a student education loan is the age bracket of 33 and 58 years for employed applicants; 25 and 70 years for self-employed customers.
- High-value Loans That Can Fund Any Education Expense
A secured education loan can fund all, no matter how expensive they are. An ideal example is the Bajaj Finserv. The company provides up to Rs. 3.5 Crore with such loans.
Bajaj Finserv also brings you pre-approved offers that help you save time by simplifying the process of availing loans. Pre-approved offers are available on secured loans like home loans, unsecured credits like business loans, personal loans, and an array of other financial products.
- Prolonged Repayment Tenure Make Emis Affordable
Repayment period of a student education loan can stretch for up to 20 years. Longer tenure reduces the burden of EMIs but increases the total cost of the loan. Shorter tenure does precisely the opposite.
For example, consider two loans of Rs. 30 Lakh at a 12% rate of interest. The first loan is for 18 years, while the second is for 12 years.
In the first case, the EMIs are Rs. 33,000 (approx.) and the cost of loan around Rs. 73 Lakh. The EMIs become around Rs. 39,000 and the cost of loan Rs. 56 Lakh (approx.) in the second case.
- Balance Transfer Facility Lets You Avail Low-Interest Rates
It may so happen that you come across a lender offering a lower rate of interest on your student education loan. In such cases, you can transfer the outstanding balance of your existing loan to that lender to take advantage of the cheaper interest rates.
- Part-prepayment Facility Helps You Reduce The Tenure Or Emis
The part-prepayment facility enables you to pay a portion of your loan that is higher than the one EMI. Part-prepaying your loan either lowers the tenure or EMIs. It also helps you save interest payable on the principal.
Before applying must have the knowledge of different types of education loan scheme available today. Also, learn how to get a student loan to make sure your application is approved quickly. Also, you must know all about a loan against the property before you apply.