3 Reasons Why a Loan Against Property is Better Than a Student Loan.


A loan against property is not the first thing that comes to mind when you think of ways to finance a further education. However, if you are going to take a loan, you should look at all the possible alternatives and an LAP is definitely worth your consideration. In fact, an LAP holds an advantage over student loans in three areas, and this article will highlight them to ensure you make sound borrowing decisions.

1. Loan amounts.
Now though most student loan promise 100% financing, getting complete funding is not as straightforward as your think. Firstly, you need to be eligible for such an amount to get 100% financing without any terms and conditions. For this, you’ll either need to have an amazing academic record or a strong financial background. If you lack in any of these fields, you may be levied with higher interest rates or required to provide security to avail the loan.

However, with an LAP, you will get 60 to 70 percent of your property’s value as the loan amount. This should be more than enough to cover the cost an education.

2. Tenures of a loan against property.

How much time you are provided to repay the loan plays an important role in deciding how easy or difficult the repayment process is. With a student loan, you are provided up to 10 years to repay the loan. Out of which, you could choose not to make any payments till you’ve found the right job or the course comes to end, which will further reduce your tenure.

However, with an LAP, you can avail as many as 15 years to repay the loan. It not might seem like much but stretching your repayment by an additional 60 months results in much smaller EMIs.

3. Interest rates.

This is one of the most important factors to consider when comparing any sort of finance solution. With a student loan, you’d have to pay anything between 10 and 16 percent as the interest rate, depending on your merit and financial capacity.

However, with a loan against property, you could enjoy rates as low as 9.80% if your mortgage a residential property. The upper limit for an LAP is 11.55 percent, and this is the rate applicable for loan in excess of 1CR and when you mortgage a commercial property.
To sum-up, with a loan against property, you get higher loan amounts, more time to repay the loan and much lower interest rates. Together, these aspects will create for a great way to finance your education plans and a smooth borrowing experience. If you cannot decide between the two, it makes sense to consult a financial expert and check which one is better suited to your needs & financial status. We hope this article has been of use to you and that it helps you find the right finance solutions. Good luck and all the best, study hard!


Comments

Post a Comment

Popular posts from this blog

Home loan Interest rates: An important factor to determine home loan amount…

Buying your dream home means spending hours to visit the property site, do background checks, documentation and finally vouch for the best home loan deal. There are leading private finance companies and banks who offer a range of housing finance products like housing loan for a new home or resale property, loan against property, home improvement/renovation loan, loan extension, etc. When you choose your home loan, it’s the interest rate which proves be the crux of the entire loan value. Different lenders offer different interest rates as per their rules and regulations and your credibility.   Since the market is quite competitive these days, you have to be extra careful because one minor mistake can lead to cause a big hole in your pockets. Besides, once it affects your overall credit rating it will be difficult for you to avail of any form of loan in the future as well. To get a better idea on the current home loan interest rates deals, you can peep into newspapers, visit ...
Read more

5 Silver Linings of Paying House Loan Interest.

Housing finance offers to make buying a home relatively easier, but this financial aid comes at a cost known as house loan interest . And though this cost might seem like a real pain in the neck with each equated monthly installment, there are a few interesting benefits & advantages of paying this cost. It may seem hard to believe but it’s true and to prove it, this article will highlight 5 silver linings of this expenses, that otherwise seems like a dark clouding looming over the end of every month! 1. House loan interest rates are at an all-time low. The first silver lining of the interest you pay on a housing loan today is the fact that you are paying interest at a rate that’s never been lower than what it is. For borrowers from 10 or 15 years ago, this rate can seem like a breeze to handle. In 2008, the prime lending rate was upwards of 12% per annum and today, there are some lenders who offer interest rates starting from as low as 8.35%. So if you’ve opted for a home...
Read more

How to choose your preferred interest rates on home loans?

A house is where your heart lies. Owning a home is one of the biggest financial goals for millions who wish to have their own abode someday. Till a few years back, buying a home was a daunting task wherein the property rates are already skyrocketing, no proper financial resource for funding and even if you find one you had to go through the tedious application and verification process. Traditional finances were way too costly in terms of extremely high-interest rates, stringent payment measure and no flexible for repayments. Borrowing from friends and relative has a chance of creating a rift in the relation. Thanks to the efforts taken by leading private finance companies and banks in India that fund your house with low home loan interest rates , and customized solution to turn your dream into reality.   Thanks to internet facilities you can compare quotes, apply for a home loan right from the cozy corners of your offices or rental houses. You don't have to visit any branches ...
Read more