Does your child dream of pursuing higher education? Well, the cost of professional courses is skyrocketing. Moreover, if they wish to continue their education in a foreign country, there will be manyis additional expenses. And, it might not always be possible to meet this huge cost from your savings.
In such situations, a loan against property can help your child fulfill their dreams. Well, you can take an educational loan. But, the process is quite time-consuming, and most lenders do not sanction an educational loan easily.
Benefits Of Taking A Loan Against Property For Your Child’s Higher Education
1. You Can Get A Higher Loan Amount
The maximum amount you can get from an educational loan is Rs 20 lakhs. Now, what if the course fee is higher than that? Moreover, you will also have to bear the living expenses in a foreign country.
An LAP loan can give you a higher amount depending on the value of your property. For instance, if your property costs Rs 70 lakhs, you can easily get a loan of 42 to 49 lakhs.
2. Flexibility In Using The Funds
If you take an educational loan, your lender will directly disburse the amount to the institute’s account. Unfortunately, that means you cannot put the money to any other use.
But, if you take a mortgage loan, you can use it for a variety of purposes. For example, after paying the tuition fees, you can use the remaining amount for buying books and me eting the living expenses.
3. A Longer Repayment Tenure
You have to repay an educational loan within 8-10 years of completion of the course. Your child might not get a job by that time. Moreover, it might take time to get the adequate salary required to pay the EMIs. Therefore an educational loan puts immense pressure on your child.
However, an LAP loan comes with a higher repayment tenure of up to 20 years. That gives enough time to repay the loan.
4. Quick And Easy Disbursal
Since it is a secured loan, the bank does not take much time to process it. You keep your property as collateral. It assures the lender of your repayment capacity.
So, you require minimum documents. And your loan gets disbursed within a few days.
5. Lower Interest Rates
Loan against property interest rates are comparatively lower. Personal loans and educational loans have a higher rate of interest. That is because they are unsecured loans.
However, you keep collateral while taking a mortgage loan. So, the bank can stay assured that you will repay the loan. As a result, they charge a lower interest rate. It brings down your EMI and the total interest outgo.
Before taking a mortgage loan for your child’s higher education, keep all your property documents in place. Make sure you know the value of your property. That will help you get a better bargain.
A mortgage loan can take your child closer to pursuing their dream course. Moreover, it will not put any extra burden on them. So, take a mortgage loan now and give wings to their dreams.