The Ministry of External Affairs has revealed data which projects that the number of Indian students going to Sydney, Melbourne and other parts of Australia for higher education has increased leaps and bounds in the last 12 years. 2019 is also no different.
We all are aware of the fact that higher education in foreign universities in Australia is a costly affair and not everyone is able to pay the fees for it. If you dream about attending the top colleges down under, an education loan for abroad studies can be your savior.
Most education loans in India offer a loan amount of up to Rs. 25 Lakh, which is sufficient for a decent education in India, but is nowhere near enough for studies in cities like Sydney, Melbourne or elsewhere in Australia. Your best option, if you aspire to study in a college overseas, is to opt for an education loan against a property that your family owns.
What is a loan against property for education?
A loan against property refers to a loan where you keep a property you own as collateral to avail funds. LAPs are secure loans, whereas education loans are unsecured. If you fail to repay the financing company within a stipulated time, your lender can liquidate the asset kept as collateral and recover the funds.
What are your options for a loan against property?
Here is a list of properties against which you can avail such an education loan for studies in Australia.
- Shops or stores
- Non-agricultural land
- Any other property with proper documentation and deed
Most reputed NBFCs, such as Bajaj Finserv, provides LAPs of up to Rs. 3.5 Crore. However, the loan amount you are eligible for depends on several other factors, including the market valuation of the property and your average income.
Why LAPs are beneficial as education loan for studies in Australia
Several features of a loan against property make it an ideal funding option, especially for studies overseas.
- Longer tenor
LAPs come with a significantly longer tenor to repay the money. For instance, most financing companies in India allow up to 20 years for loan repayment. Longer tenor results in limited financial burden on the borrower.
On the other hand, one of the key unsecured education loan details is that they offer up to 10 years for repayment of the loan. A shorter tenor generally causes higher monthly installments or EMIs.
- No UGC or AICTE approval required to avail loan
To avail a student loan in India, you need to opt for a course that is approved by the All-India Council of Technical Education (AICTE) or the University Grants Commission (UGC). However, you do not have to worry about such restrictions while opting for an education loan for abroad studies in Australia or elsewhere against the property. You do not even need to reveal your purpose for availing such a loan.
- No end-use restrictions
With funds from a LAP, you can cover multiple expenses. The end usage of the funds is not restricted. You can pay for additional expenses like purchasing gadgets, paying off medical bills, or even secure your wedding expenses with the funds. You can even purchase the top bridal makeup packages or book an expensive venue for your special day.
- The lender disburses entire loan amount at once
Unlike education loans, where the loan amount is disbursed in parts at the time of course fee payments, a LAP is disbursed all at once. In case of such a loan, the financing companies leave the funds at the discretion of the borrower. Therefore, you can decide when and how you want to spend the lent sum without any interference or oversight from the lender. There is various education loan scheme available for the students. Parents can apply under the different schemes which are suitable for their child’s future.
Make sure you check the interest rates before you apply for a LAP. Rates vary between the different NBFCs. Pick the company offering the most competitive rates to lower your financial burden.
Bajaj Finserv provides pre-approved offers to make availing loans easier and quicker. These offers are available across unsecured loans, like business and personal loans, and secured loans such as home loans.
Therefore, rather than draining all of your family’s savings on your education, opt for a loan against property. Such a credit allows you to pursue your dream education in Australia without compromising your financial security.