Is it Possible to Get a Loan Against Property for child’s higher education?

Worried About Child’s Higher Education? Here’s How a Loan Against Property Can Help You.

From tuition fees to journeying abroad and availing accommodation at a new place during the entire course of study, higher education needs significant investment.

Securing a Loan Against Property for education to pay for the educational expenditures of your child can be a flexible option, whether in India or abroad. You just need to mortgage your property as collateral to the bank to obtain this loan.

Probable Reasons Of Facing Rejection When Applying For An Educational Loan

• When the parent’s income does not meet the eligibility criteria;

• If the concerned college is not approved by AICTE/UGC, as most banks lend only to AICTE / UGC affiliated institutions;

• Weak Credit / CIBIL score

Loan Against Property – A Primer

• Principal – This is the net amount that the bank will sanction with certainty. Usually, 50-60% of the collateral’s market value is considered as principal. However, the valuation of the property can go up to 70%, depending on the borrower’s profile and robust credit performance.

• Rates of Interest – Interest rate alludes to the cost of your principal amount. This is indicative of the additional amount that you need to pay back alongside the principal amount.

Loan against property interest rates could range between 11% and 15% per annum. But borrowers with a bona fide financial profile and a healthy credit history can negotiate and can bring down the interest rate to even 9.50%.

• Tenure of Mortgage – This indicates the total time you get to reimburse your loan, that is, the principal amount and the interest. In case of a loan against property, the concerned financial institution can grant you a repayment period that can stretch up to 15 years.

• Equated Monthly Instalments (EMI) – EMI is a suitable method that lets you pay off your mortgage via monthly instalments instead of reimbursing a lump sum amount every year. EMIs are determined by dividing the principal amount and interest by the tenure of the loan.

Advantages of Securing Loan Against Property For Higher Education

• Inexpensive Loan of High Value
Procure a Loan Against Property for your child’s higher studies of value that can go up to rupees one crore if you earn a monthly salary. In case you are self-employed, you may secure a loan up to a maximum of INR 3.5 Crore.

• Easy Loan Disbursal
The disbursal process of a loan against property is simple. Go through the eligibility criteria and submit the required documents to get your loan processed quickly. Get the loan amount in your account within just four days from the approval date.

• Long and Viable Tenure of Repayment
Pay off your loan against property for education by selecting a tenure at your convenience. The period of repayment can vary from 2 and 20 years for a salaried person. For self-employed borrowers, the term can extend up to a maximum period of 18 years.

• Basic Documentation
Loans against property for education are processed with minimum documentation. You need to submit around seven documents to secure approval.

• Lower Interest Rates
Education loan interest rates are always higher than that of the loan against a property interest rate. Therefore, LAP tends to be more cost-effective.


To sum it up, if you fail to secure an educational loan for your child, that does not bring your child’s educational aspirations to a halt. Unlock the opportunities of higher education for your child by using a loan against property to finance their education. Do not let your financial hurdles interfere with your child’s career ambitions.

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