What is Loan Against Property?
It is not always easy to access a large sum of funds in a time of need. Loan Against Property will help you gather a large sum of funds by using your property such as a house, land, or any commercial property as collateral with a bank or a lender. These types of loans are secured and the nature of it makes it so that the banks and lenders are less hesitant to provide these loans since the property is mortgaged to the lender. The assets remain with the lender for the duration of the loan tenor and once the loan amount is repaid the property is transferred back to the borrower. This type of loan is lucrative for the borrower as the property can be still used by the borrower during the tenor of the loan.
What are the benefits of an Education Loan Against Property?
In comparison to another form of loan that offers a higher sum of funds like a housing loan, the purpose of these funds is strictly restricted to the purchase of a house, apartment, or a form of land. This is not the same in the case of LAP Loan as the funds can be used for any purpose that the borrower may deem fit such as the purchase of property, higher education, business development, etc.
It is understandable that studies abroad can be exorbitant and that expenses can add up over time and it may not be possible to gather a large sum of money for everyone. It is possible to tackle these expenses by mortgaging your property. Amongst this, there are benefits of an Education Loan Against Property such as:
- Low-interest rates are offered as the loan amount is secured. Public sectors bank offer a starting interest rate of 7.20% and private sector banks may offer a slightly higher interest rate.
- Since the documentation and processing of Loans Against Properties are straightforward to acquire these days. Making this ideal for acquiring funds for studies abroad.
- Loans Against Properties have flexible repayment tenors and borrowers can opt for a duration of their choice. The maximum duration is of 20 years.
- Since studying abroad is a big-ticket expense, Loan Against Property offer high-value loan amounts that will ensure that your expenses abroad are met without any hesitations.
- Disbursal of these loans is quick, easy, and hassle-free.
- Processing fees on Loan Against Property is really low.
How to calculate the EMI for an Education Loan Against Property?
An online education loan emi calculator will help establish your monthly payments, you can figure this out by using the many calculators that are available online and are issued by banks or lenders. They establish this by considering details such as your principal amount, interest rate, and the tenor period.
- Enter the principal amount that you will be borrowing
- Enter the interest rate that is being offered by the lender
- Enter the tenor that suits your repayment structure
With the help of these 3 details, you can estimate the monthly installments that you will be paying to the bank or lender.
How to avail a Loan Against Property?
It is fairly easy to avail a Loan Against Property, you may either approach a bank or a lender of your choice and apply for a Loan Against Property. The bank or lender will begin the process by accumulating the documents required from you such as:
- Pan Card, Aadhaar Card, Passport
- Income Tax returns for the past 3 years
- Salary payslip for the past 6 to 12 months as proof of income
- Address proof
- Copy of documents that is to be mortgaged
After these documents are collected the banks will verify the legitimacy of the documents and once this is done the banks will conduct a valuation for your property. Valuation determined the amount of loan that will be sanctioned against your property.
Most banks and lenders offer up to 60-70% of the market value of the property. It may help increase your valuation if your property is well maintained if the age of the property is not very old and if it is located in a good locality.