According to a recent report, the annual tuition fees for a bachelor’s degree in engineering in Australia were between Rs. 12 and Rs. 17 lakh. Similarly, annual tuition fees in Canada were between Rs. 8 and Rs. 20 lakh. Moreover, the cost of overseas education is increasing by 15% every year. Added to this is the living expense, which varies across countries. But this is sure to set you back by another Rs. 50,000 to Rs. 1,00,000 annually. With such extravagant expenses to tackle, the age-old practice of setting aside funds may not be enough to cover the cost of overseas education and living expenses.
As a parent, investing your money in various options is a good way to plan for it, but it also helps to look at other avenues to secure funding. Therefore, it may be time to consider borrowing through options such as an education loan. But, what is an education loan?
Student loan in India for higher studies
Conventionally, an education or student loan in India is a funding you can avail from a financial institution to fund higher education cost. As a parent or guardian of the student, you can borrow this loan on their behalf, or they can borrow it themselves. However, you or your child must adhere to strict eligibility criteria in order to qualify for the loan. Generally, the main education loan requirements are excellent academic scores and a high-value course from a reputed institution. Following this, you must provide proof of admission to start with any loan processing procedures.
Information is of prime importance when it comes to borrowing via an education loan. This is because it can be easy to overlook or miss important details. For example, when learning how to apply for an education loan, you may miss out that you get a grace period of up to 1 year, post which you start repaying installments.
As you may notice, this loan, while beneficial, can be time-consuming and difficult to obtain due to its stringent requirements. Thankfully, other financial options are also available in the market. You can qualify for such loans based on simpler eligibility terms and avail a quick sanction of a hefty amount. To know more about these solutions, read on.
Best way to avail an education loan for abroad studies in India
An alternate option can be a personal loan. Being an unsecured sanction, it is easy to apply for and obtain a personal loan for education-related expenses. Moreover, when used for education, you can claim tax exemptions based on your repayments under Section 80E of the Income Tax Act, just like a conventional education loan. However, the loan amount may not always be enough to completely fund the course fee and other expenses.
This is where the loan against property comes to your rescue. In order to access this loan, you can pledge your high-value asset or property with a lender and apply for a loan. Even though the final loan amount will depend on the value of your property, you can get up to 75% of your security’s worth as a loan. Since it is a secured borrowing option, applying for the loan is easy, and with security at stake, you can repay the loan with a longer tenor ranging up to 18 years. Additionally, depending on the lender you choose, you can benefit from relaxed eligibility criteria, making it easier to secure the funding you need. What’s more, you benefit from lower interest rates with this secured loan instead of a collateral-free option.
Some offerings even have additional value-added features to maximise your borrowing experience. For example, when you opt for the Loan Against Property as an education loan for abroad studies, you benefit from the Flexi-loan facilities that come with it. This helps you borrow from your sanction as and when you require funds. Here, the interest is charged only on the amount you withdraw and not the entire sanction. The applications of this feature are plenty, especially if your child is studying overseas, as you may not be able to predict all expenses. You can also choose to repay the loan initially with interest-only EMIs and pay the principal only at the end of the tenor. This further lowers the EMIs by up to 45% and allows you to tackle other expenses with ease and manage your cash flow better.
Now that you know of an efficient way to secure funding for education-related expenses, the next step is research. To identify the right option, you must scout the market for the most suitable education loan interest rate in India. Conducting your research is of prime importance; however, with a commitment of this magnitude, it is best to ensure you have all your bases covered. So, here is a detailed breakdown of how you can go about it.
How to choose an education loan with a low-interest rate in India
In order to settle on the best education loan interest rate, you must first start by shortlisting a few top-tier lenders. Then use an education loan calculator to compute your total interest payable for a suitable tenor accurately. This dictates the total cost of the loan so the lower, the better. However, simply finding a low-interest rate offering isn’t enough to keep your costs low. This is because certain lenders may have higher fees and hidden charges. Therefore, the Bajaj Finserv Loan Against Property for Education is a smart choice to consider because it offers a competitive interest rate and has no hidden charges.
Unlike conventional education loan interest rates, which may vary between 8.45% and 15.2% per annum, the loan against property interest rates is competitive, owing to their secured nature. Also, at lower rates, you can get a hefty sanction of up to Rs. 5 crore and more, which you can repay via a tenor of upto 18 years. Additionally, you can get approval instantly and have the entire sanction disbursed to your account within 72 hours post-approval. Further, availing a floating interest rate loan allows you to enjoy zero part-prepayment and foreclosure charges.
Now that you know about this affordable financial option, the next step in your borrowing journey is to learn how to get low interest on an education loan. In Bajaj Finserv, the application process is straightforward and easy to follow. Here is how you can go about it.
How to apply for a Bajaj Finserv Loan Against Property for education
The most important thing to you must follow when deciding how to apply for an education loan are the lender’s eligibility criteria. In this case, you can qualify for the loan basis simple criteria. Here is what it entails.
As a salaried applicant:
- You should be an Indian resident
- You should be between 23 and 62 years of age
- You should be employed in an MNC, a private or public company
As a self-employed applicant:
- You should be a resident Indian
- You should be between 25 and 70 years of age
- You should be residing in one of the approved cities
- You should have a regular source of income
Once you meet these eligibility terms and conditions, furnish the following documents when applying for this student loan in India.
For salaried individuals:
- Recent salary slips
- Last 3 months’ bank account statements
- PAN card and Aadhaar card
- Residential proof
- Copy of your property’s documents
- Income tax return
For self-employed individuals:
- Last 6 months’ bank account statements
- PAN card and Aadhaar card
- Residential proof
- Copy of your property’s documents
How to apply for an education loan for abroad studies
Like the simple eligibility process, applying for this loan is also easy. With Bajaj Finserv, you can enjoy a simple Loan Against Property application process. All you have to do is follow these easy steps.
- Visit the official Bajaj Finserv website
- Fill up the online application form and submit it
- Wait for a Bajaj Finserv representative to contact you within 24 hour
- If approved, submit all the necessary documents to complete the application
You will get approval on your application within a short time, post which money will be disbursed straight to your account.
Besides the benefits and features, opting for a Bajaj Finserv Loan Against Property allows you to use funds from your sanction as per your discretion. Unlike an education loan, where the course fee is directly transferred to the institute, a Loan Against Property for education-related expenses is disbursed to your account. This means apart from the course fee, you can use the funds to meet other auxiliary expenses for your child, be it living and transport costs, travelling expenses, course books, and electronics and more.
Additional Read: Tax benefits on education loan on property
This greatly helps your child adapt to the new environment and reduces any incoming stress caused by financial insecurity. To get started on your loan application online, check your pre-approved offer by simply entering personal details such as your name and phone number. Thereafter, get access a substantial sanction hassle-free, on convenient terms.
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