Savings are a crucial part of adult life. Savings can help fulfill financial obligations and provide a sense of security to the family. However, in certain cases, you might require additional assistance, such as the higher education of your child. Usually, this expense can be conveniently met by taking up an educational loan. But in some cases, it can become exceedingly difficult to obtain an educational loan. During such instances, a Loan Against Property can prove to be a good alternative. A loan against property is availed by pledging your property as collateral to the bank.
Below are some of the benefits of availing a loan against property for child’s education.
Quick Approval
You can get an approval for a Loan Against Property quite easily. Since Loan against Property is a secured loan, the loan provider is at a lower risk of losing their money as they can recover the amount through collaterals. Also, the application process of a Loan Against Property is comparatively easier than that of an education loan.
Lower Interest Rates
Banks and other financial institutions offer competitive interest rates on Loan Against Property. This is because of Loan Against Property is a secured loan and has low-risk factor associated with it.
Higher Loan Amount
The loan amount for a Loan Against Property is much than that of an educational loan. The Loan amount depends on the market value of your property. Higher loan amount will make it convenient for your child to pursue their education, at a college or university in a country of their choice.
Longer Repayment Term
Most financial institutions expect repayment of education loan within 8-10 years from the completion of course that the student is pursuing. Whereas, on the other hand, Loan Against Property offers a longer repayment period of up to 20 years. This reduces the financial burden on your child.
Multipurpose use
In case of an educational loan, the loan amount is often credited directly to the institution or college. Whereas, in case of a Loan Against Property, the disbursed amount is handed over to you. Therefore, if you want the additional funds to sponsor your child’s living expenses, you can conveniently do so with the help of Loan Against Property.
Now that you are well aware of the intricacies of Loan Against Property for your child’s education, you can make a better-informed decision by making a note of various parameters of your loan agreement. However, while availing a loan against property, it is advisable to compare the deals offered to you by various loan providers. This will allow you to avail a higher loan amount at the most competitive interest rate. Lastly, do not forget to read the terms and conditions of the loan agreement carefully before opting for it.
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