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Here’s the Best Way to Fund Your Child’s Higher Education With a Loan Against Property


Jan 28, 2021

With every passing year, higher education costs are rising. The escalating higher education expenses may force you to compromise with your child’s education. However, with a loan against property by your side, you do not need to sacrifice the noble dream of educating your child. A loan against property allows you to unlock the real value of your asset and fulfil your life’s most cherished dream. 

Read this article to know how a loan against property can provide you with the funds you need to sponsor your child’s higher education.

What is a Loan Against Property?

Loan against property or mortgage loan is a secured loan. Any Indian citizen can apply for a loan against property if they own a dispute-free residential or commercial property. The lender will evaluate your property papers and determine the loan amount. You can select the loan term and submit the documents required to avail the loan. If everything goes as planned, you can expect the funds in your account within a few days.

Things to Consider Before Availing a Loan Against Property

To ensure you get a loan against property with the best terms, keep in mind the following factors:

Principal Amount

Indian lenders usually approve up to 60% of the property value as the loan amount. In some cases, it may go up to 70%. However, the final loan amount depends on your credit score, income, property status, and relationship with the lender. Remember, the higher the principal, the more the EMIs. You can use a mortgage loan EMI calculator to check your monthly liability and choose the right loan amount.

Rate of Interest

The rate of interest is the extra amount you need to pay to the lender along with the principal. Usually, loan against property interest rates start from 9.50%, and you can get the best rates if your credit score is above 800. 

Loan Term

Most lenders offer a loan term between 15 and 20 years to repay the loan against property principal and interest. The loan term is inversely linked to the EMIs. Hence, the higher the loan term, the lower the EMIs.

EMI or Equated Monthly Instalment

EMI is the most important figure in a borrower’s life. You can check your EMIs in advance by opening a mortgage loan EMI calculatorand entering details such as loan amount, tenure, and interest rate. During the early years of the loan repayment term, your EMI comprises of the interest amount. The loan amortisation table gives you detailed information about the loan principal and interest.


While applying for a loan against property, the lender may ask you to submit documents like age and residence proof, income proof, bank account statement, income tax documents, and property papers. Additionally, you will need to submit the application form and a photograph.  


You can apply for a loan against property for funding your child’s higher education in two ways – online or offline. If you choose the online mode, you can upload your documents online and wait for your property’s physical verification. However, if you choose the offline mode, you need to physically visit the lender’s office and complete the formalities. 

Like most other loans, a loan against property does not have complicated eligibility criteria. However, it is always better to enquire about the loan terms before signing the application form.

Additional Read: Wearing a Mask– Seven Myths and Facts to Fight the Conflict

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