Taking a loan against property for education in India is beneficial to address the expensive tuition fees, hostel rent, food, and other expenses of your child’s higher studies. 

The low rate of interest and longer tenure are beneficial to reduce the burden of EMIs, especially when the loan amount is high. You also get the funds in your account within four days by submitting only a few documents.  

The overall features and facilities offered by NBFCs ensure that you can manage the loan effectively. However, you may come across a financial crisis that can make repayment problematic.

In such cases, you can do the following:

  • Extend The Repayment Tenure

Loans against property for education in India come with tenure that can go up to 20 years. You can ask your lender to extend the tenure if you have availed a shorter one. Doing so lowers your EMIs and makes them affordable.

For example, your EMIs are around Rs. 68,000 for a loan of Rs. 50 Lakh at 11% rate of interest for 10 years. Your EMIs will become about Rs. 56,000 if you extend the tenure by 5 years.

However, be advised that extending the tenure will also increase the total payable interest. Your interest of Rs. 32 Lakh (approx.) in the first case will increase to Rs. 52 Lakh approximately.

  • Transfer the Balance 

You can transfer the balance of your education loan to another lender, offering a lower rate of interest. Hence, this facility can help you enjoy reduced EMIs. 

Be advised that the new lender might charge you processing fees and other charges. You may have to submit all the documents needed to avail a loan.

  • Ask For A Repayment Holiday 

A repayment holiday enables you to pause your EMI payment. You can approach your lender and ask for such a holiday if you are facing financing problems. Usually, financial institutions can let you paused EMI payments for up to 6 months.

  • Cut Down On Unnecessary Expenses 

One of the ways to manage your education loan in India EMIs is to reduce your unnecessary expenses. Decrease your credit card expenses if you use one. Similarly, find out other spends that you can eliminate. Creating a budget can help you find out purchases which unnecessarily hog your income.

  • Take A Part-time Job 

Taking a part-time job can help your parents pay the EMIs more conformably during a financial crisis.  A temporary job can make it easier for the loan repayment until the crisis situation eradicates.

Keep these points in mind to manage your loan against property for education in India more effectively.

Opt for these facilities to repay your existing loan effectively when you have the necessary funds:

  1. Foreclosure 

Foreclosing your loan before the tenure ends helps you save on interest. Picking the right time to foreclose your loan is crucial to gain the maximum benefits. 

Your loan EMIs may equal every month, but the interest and principal component is different. The majority portion of your EMIs constitutes the interest when the tenure begins. The interest lowers and the principal increases towards the end.

Hence, you will have to pay a lump sum amount when you foreclose towards the beginning of the tenure. Foreclosing is beneficial during the middle of the repayment period when the interest and principal content in your EMIs are similar.

2. Part-prepayment 

Part-prepaying a significant portion of your loan either reduces the tenure or lowers your EMIs. It is beneficial to part-prepay your loan against the property if you have received a hike or a bonus. Doing so can also help you save on the total payable interest. 

Make sure to go through your education loan details as foreclosure and part-prepayment facilities come against certain charges. However, NBFCs like Bajaj Finserv don’t charge you any additional fees when you avail these facilities provided you are paying a floating rate of interest.

Additional Read: How to Avail Tax benefits on Loan Against Property?

Bajaj Finserv also brings you pre-approved offers that help you save time by making the process of availing loans hassle-free. Pre-approved offers are available on secured loans like home loans, unsecured credits like business loans, personal loans, and numerous other financial products. Consider all of these points to manage your loan against property for education in India more effectively.