The cost of education is rising exponentially every year, and this scenario is challenging one’s financial means. To counter this, one can opt for credit facilities like education loans. This tailor-made financial product helps individuals meet their education-related expenses, and one can receive it from any financial institution they want. Explore Small Business Ideas like financial coaching to empower borrowers with smart education loan management.

Apart from that, individuals can also look for various government schemes offering similar benefits.

Types of Government Education Loan Schemes  

The different types of education loan schemes extended by the government in India are as follows –

Padho Pardesh Scheme

Padho Pardesh Scheme is primarily designed for minority communities to meet the expenses of overseas education. 

Vidyalakshmi Scheme

Vidhyalaxmi Scheme is an educational portal that allows students to avail of a loan to fund their education and is developed under the central government’s guidance. Secure your funding round for educational dreams with a strategic education loan, empowering your future without jeopardizing your finances. Individuals can apply for any education loan that they want through this platform.

Central Scheme of Interest Subsidy for Education Loan 

Students from the EWS category can get an education loan for professional and technical studies.

Dr. Ambedkar Central Sector Scheme of Interest Subsidy 

Students from EBC and OBC categories can avail of an education loan under this scheme to pursue abroad studies.

Apart from these government schemes, individuals can also opt for a loan against property for education to fund expenses of their courses. 

Eligibility criteria of education loan against property 

The eligibility criteria for education loans on a property are – 

• Students must be citizens of India
• They must be between 25 to 70 years of age
• Self-employed individuals must have a steady source of income from a business
• Salaried applicants must be employees for any multinational, private or public organisation

Documents required for education loan against property

The documentation requirement for education loan on the property is – 

KYC documents

• Voter ID
• PAN card
• Passport
• Aadhaar card
• Driving licence 

Income proof 

• Bank account statements
• ITR documents
• Financial statements 

Documents of property

But, before submitting an application, individuals must learn the process of applying for it.

Steps to apply for an education loan on a property

The steps to apply for an education loan on the property are – 

Step 1: Visit the official website of your preferred lender 

Step 2: Navigate to the LAP section and click on ‘Apply Online’ for the digital application form

Step 3: Fill in the preliminary details

Step 4: Then, provide the personal and professional details to proceed

Step 5: Finally, upload the necessary documents for verification and proceed to submit the application form

Must Read: know how to use loan against property calculator in easy steps

Benefits of availing a loan against property for education  

Most leading lenders in India provide a plethora of benefits for borrowers. Although there are myriad benefits, a few of them are provided below – 

Substantial funding 

As for education loans against property, borrowers keep their properties as mortgage. Therefore, lenders provide substantial funding depending on that property’s market value. Hence, availing a loan against property for education helps in meeting expenses without any hassle.  Juggling education loan repayments while prioritizing retirement goals requires a strategic plan and potentially delaying retirement to ensure financial security later.

Longer repayment tenor 

An education loan against property comes with a longer repayment tenor that makes repayment swifter and lowers EMIs. This eases financial planning and makes repayment less challenging for borrowers. 

Top-up loan facility 

Leading financial institutions in India provide top-up loan opportunities, allowing debtors to add more value to their loans.   

Tax benefits 

A loan against property tax benefits is one of the major benefits of a LAP. In addition, under the Income Tax Act, borrowers can avail of certain tax benefits as per Section 37 (1) and 24(B).

No end-use restrictions

Another notable advantage of using a loan against property for education is that a LAP has no end-use restrictions. It means one can fund tuition fees along with associated expenses using this financing method.

Pre-approved offers

Leading financial institutions in India also offer pre-approved offers that simplify and expedite loan processing. Such offers are available on a range of financial products like loans against property, home loans, etc. Applicants can enter their name and contact number to check their pre-approved loan offer. 

Thus, an education loan is a smart choice to meet the academic expenses, but in case of additional fund requirements, one can opt for a LAP. 

 Factors to consider before availing a LAP for education  

A few of the pointers to consider before selecting a lender is – 

Loan amount 

The loan which a financial institution disburses depends on multiple factors. First, however, candidates must check the LTV ratio of the lending institution as depending on this, the lender decides the sanctioned money. But, apart from it, the property’s type, age, and location also significantly affect the monetary amount.   

Processing fee and disbursal time 

Apart from the loan amount, lenders levy a processing fee. Nevertheless, this amount is substantially less, and in addition to it, they must check other applicable charges. However, the disbursal time might vary with lenders, and they must check it beforehand, as students might require funds on an urgent basis.  

Tenor and interest rate 

As mentioned above, these two factors affect the affordability of a loan against property for education. So, before applying, check the maximum tenor available and the interest rate. But, individuals must note that a longer tenor might fetch a lower EMI, but this will increase the total number of EMI paid and the total interest paid. So, before choosing the tenor, prospective borrowers must be cautious about this factor. 

In India, reputed financers extend pre-approved offers that simplify and expedite loan processing. Such offers are available on various financial products like loans against property, home loans, etc. You can enter your name and contact number to check your pre-approved loan offer. Hence, availing an education loan has myriad benefits and helps a student meet the education fund requirement. Also, to get good value of the property for an education loan, one must consider the pointers mentioned above.