Education Loan Against Property [Agricultural Land and House]

Education Loan against property,  also known as a secured education loan. It is an option for individuals who own agricultural land or houses and need to finance their higher education expenses. 
It is also beneficial for students, who require a higher loan amount. 

Secured education loans can provide a higher loan amount than an unsecured or non-collateralized education loan. One of the significant advantages of an education loan against property is the lower interest rate offered by financial institutions. The interest rate for a secured education loan is lower than for unsecured education loans as the collateral reduces the lender's risk.

Most of the time secured loans are generally offered by public banks. They offer lower interest rates, better moratorium periods and longer repayment tenures than other financing options. In this section, we are going to learn about the types of collateral accepted by public private and public banks.
 
The collateral accepted by Public banks is categorized into 2 types

• Immovable Property:
  • Independent house
  • Flat
  • Non-agricultural Land
• Liquid security:
  • Government bonds
  • Fixed Deposits
  • LIC Policies 

In this section, we are going to learn more about Education Loans offered against Agricultural Land.

• To qualify for this education loan product, more than 50% of your parent's or spouse's income must come from agriculture, and you cannot own any non-agricultural properties. 
• You'll need a certificate from a Tehsildar to prove your eligibility, and the bank will also verify your land-holding records.
• A bad credit history, such as loan defaults or NPAs, will disqualify you.
• The loan is available for undergraduate and postgraduate engineering and management courses, as well as medical courses like MBBS, BDS, BAMS, and BHMS, in India and abroad. 
• You must have secured at least 60% marks in your last education to qualify, and the credibility of your institute is also important.
• The maximum loan amount is 15 lacs for studies in India and 30 lacs for studies abroad. You can use the loan to cover all expenses, including tuition fees, living expenses, and hostel fees. 
• During the moratorium period, which lasts for the duration of your course plus one year, you don't need to make EMI or interest payments. 
• You can request a call back from a WeMakeScholars financial officer to learn more about the loan product and its eligibility criteria.

• If an education loan against agricultural land isn't possible, the next best option is to explore other types of education loans that do not require agricultural land as collateral. These may include loans against Houses,
• Flat, Non-Agricultural Land Government bonds, FDs or LIC Policies. 
• An education loan against a house is a type of loan where the borrower pledges their residential property as collateral for the loan. This type of loan is similar to a home equity loan, where the borrower can borrow money against the equity in their home. 
• Many banks generally prefer Residential property over other collateral options such as Rural property, Commercial property, Mutual funds or empty land (Both agricultural and non-agricultural land)

All the education loan schemes offered by the State Bank of India (SBI) are collateralized or loans secured through property if the required loan amount exceeds 7.5 Lakhs. If the required loan amount is less than 7.5 lakhs SBI provides an unsecured education loan under the CGFSEL Scheme. 

You can read more about specific education loan schemes offered by SBI by clicking here.

 B Khata property in Bangalore refers to a property that falls outside the jurisdiction of the Bruhat Bengaluru Mahanagara Palike (BBMP), the city's municipal corporation. These properties are typically regarded as unauthorized or illegal because they fail to adhere to building bylaws, zoning regulations, and other legal mandates established by the BBMP. B Khata properties often lack crucial documents and clearances, such as occupancy certificates, and may have outstanding property tax payments.

Despite these drawbacks, B Khata properties still receive basic civic amenities, though they do not possess the same status as A Khata properties, which are legally sanctioned and fully compliant with all relevant regulations and requirements.

While government banks do not accept properties with B Khata, certain private banks may consider them if there is DC conversion (Direct commissioner’s authorization). B Khata refers to properties that violate building bylaws, have pending property tax clearances, or do not comply with government regulations regarding properties.

When acquiring properties through gifts or wills, it is crucial to follow certain requirements and procedures. 

• First, the gift deed or will document should be registered to authenticate the transfer of ownership. 
• Next, the property must be officially registered in the new owner's name to establish legal ownership. 
• It is also advisable to obtain two legal reports that assess the property's legal status and any encumbrances, ensuring clear ownership rights for the new owner. 
• In the case of properties acquired through a will, additional documents such as the death certificate of the testator and documents like a Legal Heir Certificate, Succession Certificate, or Registered Family Tree are necessary to determine the rightful beneficiaries.
• By adhering to these procedures and fulfilling the required documentation, individuals can ensure a smooth and legally valid transfer of ownership for properties acquired through gifts or wills.

Below given are the general steps to acquiring a secured education loan.

Step 1: To obtain a secured education loan, you are required to complete the loan application form provided by the banks.

Step 2: After completing the application form, you will need to gather and submit all the necessary documents requested by the banks.

Step 3: Following the submission of documents, a comprehensive legal verification and valuation of the collateral will be conducted. The findings from this process, along with the submitted documents, will be forwarded to the central loan processing cell.

Step 4: The designated processing officer will carefully review your loan application and authenticate the information provided.

Step 5: Once your loan application has been approved, you will be issued a loan sanction letter. However, it is important to note that you will be required to pay a processing fee before receiving this letter.

But going through public banks can be a stressful process, often involving long queues, complicated paperwork, and uncertain timelines, which can add unnecessary anxiety to your loan application journey. We understand that dealing with bureaucratic procedures and navigating through multiple layers of approvals can be overwhelming, especially when you're focused on pursuing your education goals.

At WeMakeScholars, we're here to make your dream career a reality. Our initiative is supported by the Indian government as part of their Digital India Campaign, and we're dedicated to helping students like you finance your higher education, whether in India or abroad. We want to simplify the process of applying for an education loan and ensure that you have a positive experience.

Step 1: Get in touch with us by requesting a callback or filling out the common application form on our user-friendly website.

Step 2: Share all the necessary information with our friendly financial officer. Once they review your details, they will connect you with suitable lenders who understand your financial needs.

Step 3: Explore the loan offers provided by different lenders and compare them. Choose the lender that best suits your requirements and inform the financial officer about your decision.

Step 4: After selecting a lender, our financial officer will provide you with a personalized list of required documents. It's important to gather and submit all the necessary papers promptly through our secure WeMakeScholars portal or directly to the bank. This will make the loan application process quick and hassle-free.

Step 5: Once you've submitted the documents and initiated the loan process, relax and let our dedicated financial officer take care of everything. We'll keep you informed through regular updates and you may receive calls from the lender or financial officer to ensure you're well-informed throughout the process.

Step 6: Typically, the lender takes around 7 working days to approve and sanction the loan. Once your loan is approved, you'll receive a loan sanction letter containing all the details such as the loan amount, interest rate, repayment period, and terms and conditions.

Benefits Of Going Through WeMakeScholars

• Negotiation: WeMakeScholars can help you negotiate a lower interest rate for your unsecured loan, potentially reducing it by 2% from the original offer. This means you can save money on your loan and have more financial flexibility.
• Expertise in solving complex cases: WeMakeScholars has a team of experienced professionals who specialize in handling complex loan applications. No matter the challenges you face, we have the knowledge and skills to overcome them and secure a loan for you.
• Transparent process: We value transparency and believe in keeping you informed every step of the way. We'll update you on the progress of your loan application and address any questions or concerns you may have. Our goal is to make the entire loan application process as simple and easy as possible for you.
• Cashback rewards: As a token of appreciation, WeMakeScholars offers a cashback reward to students who take out a study abroad loan through our platform. You could receive cashback added to your first loan disbursement, with the highest cashback amount available being INR 3000.