How to Use Your Property to Refinance Student Loan?

Education is one of the most significant investments you can make to secure your future. However, we live in an era where the cost of education, especially higher studies, is extremely expensive. To this end, a lot of students avail a student loan but are unable to refinance it if they don’t secure a job in time or if the period of their study extends beyond the loan tenure.

Moreover, student loans also don’t cover unforeseen expenses, unless their terms are renegotiated, and the loans are refinanced. This is where being the owner of property helps. You can easily Get a Loan Against Property and refinance your existing education loan.

What is a Loan Against Property?

A Loan Against Property requires you to mortgage the property you own to secure a loan. You can use these funds to finance any of your financial needs such as medical expenses, education, business expansion, and so on. Being a secured form of financing, this loan comes at a lower interest rate than that of unsecured loans like a Personal Loan.

What Types of Property Can Be Mortgaged?

You can use any type of property to get a Loan Against Property. It can be any type of residential or commercial property or land.

The only condition, however, is that the property should be completely legal with full-fledged documentation and should have a clean title. Also, the property should be personal. It cannot be obtained on rent from a third party and then mortgaged further without their consent.

What are the Eligibility Conditions?

For refinancing an existing student loan through a Loan Against Property, the borrower must meet certain eligibility conditions, including:

· The borrower or his parents should either be self-employed professionals or salaried employees. This is to ensure that the risk of defaulting on the loan is low.

· The credit history and the creditworthiness of the borrower should be high. This is determined by checking the borrower’s CIBIL score before sanctioning a Loan Against Property.

· The property being mortgaged should be located at a prime location. This is because if the borrower defaults on the loan and if the bank has to fall back on selling the property, a good location will help the bank derive more value.

· The loan is usually sanctioned at 40–90% of the market value of the property irrespective of it being a commercial or residential building.

How is a Loan Against Property Beneficial?

For most practical purposes, Loan Against Property interest rate and other associated charges are relatively low. This makes the loan cheaper and the refinancing process easier. Nevertheless, apart from these, the other benefits which a borrower stands to reap are:

· This loan variant comes with a long tenure. Though it varies from bank to bank, tenures can usually be extended up to 20 years.

· Due to having the privilege of a longer tenure to repay the loan, the equated monthly instalment (EMI) burden is reduced, and you don’t have to rush to find a job immediately after having completed your studies.

· A Loan Against Property can be used to undertake any course, whether in a domestic or a foreign institution.

· The complete loan amount is disbursed in one go. You don’t have to wait for quarterly instalments.

· A Loan Against Property can be used in many ways. It can be used for reasons as varied as arranging for accommodation near the college, paying the library fees, paying the tuition fees, for purchasing books, and so on.

How Can MyMoneyMantra Help You?

MyMoneyMantra is a leading online lending marketplace that offers Loan Against Property offers of over 70 banks and non-banking financial companies (NBFCs) at one place. You can compare various offers based on interest rate, tenure, processing fee and other charges. You can undertake a comparative analysis before arriving at a decision.

Refinancing your existing education loan by taking a Loan Against Property is a stable, secure, and reliable way to ensure that the expenses incurred during your studies are met duly.

Also Read: 7 Reasons a Loan Against Property May be Declined

To apply online for Credit Cards, Secured Loans, and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.

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