Lets understand why Loan Against Property will be a better choice for funding higher education .Higher education is expensive and the cost to finance it is increasing every year. The tuition fee for certain courses in India starts from Rs. 5 lakhs and arranging for liquid funds for such a hefty amount may not be easy. Apart from this, overheads like hostel fees, canteen, books, etc also add up. If you opt for your child to study abroad, the total cost may go to 50 lakhs on average with additional fees for visa application and travel expenses. To achieve this goal you have to think about how you can plan smartly without putting a major dent in your savings. If you own a property, it will be the most valuable asset which can come in handy for generating funds.
Reasons Loan Against Property is a better choice for funding Higher Education:
- Loan against a property attracts a lower interest since you are mortgaging your asset which is a property, in this case, however rate of interest also depends upon other factors like credit score, property type, nature of work, etc
- Longer Tenure of up to 15 years on LAP allows you to comfortably pay off the EMIs.
- Loans come with flexible options that offer enhancement of loan amount, flexibility in EMIs, ability to extend the tenure, etc.
- Easy to avail since it is a secured loan. Hence most financial institutions are willing to provide a LAP simply because a property is an attractive asset in financial terms.
- Faster disbursal if your property and related documents are in place & if you need to seek funds on a fast-track basis, LAP provides this option.
- Better option than education loan because of higher funding, longer replaying time, lower interest and hence EMIs, better chances of approval. On the contrary education loan is a kind of personal loan with a higher interest rate.
Hence if you are sure to go ahead ensure that the title of the property in question is clear and no encumbrance or litigation is pending on the asset. Additionally, your property must also be insured and maintained.