Education loan has become a necessity if you are thinking of pursuing a higher education. One of the prime reasons why education loan has become a necessity is due to expensive nature of education. While education loan is important and easy to avail, it is not cheap to repay the loan. There are a lot of factors that you will need to consider before applying for an education. The prime factor that you should consider is the education loan interest rate. The interest rate of the education loan depends on a variety of factors. However, if your loan amount exceeds INR 7 Lakhs, then you will need to use an asset as collateral. But, can you use agricultural land as collateral? Let us find out:
Agricultural Land as Collateral
The answer to the above question, in a nutshell, would be yes. You can definitely use agricultural land as collateral for availing an education loan. The prime aspect that matters for in considering an asset as collateral is the value of the asset compared to the education loan amount. If the value of the asset is at par with or exceeds the amount of the loan, then you can use it as collateral. However, there are a few drawbacks to using agricultural land as collateral.
One of the prime drawbacks is that if the education loan repayment is not carried out in a timely fashion then you your agricultural land may be seized or auctioned. This could be devastating for families that rely on the land as their largest source of income. Additionally, the reason most people prefer to mortgage other assets is that their value is higher than the agricultural land with respect to the area and utility of the land.
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While you may very well decide to mortgage agricultural land for education loan, you should consider avenues other than banks. This is particularly apt for people that do not require a huge loan amount but need it quickly. For such people, the best option is PaySense. Not only will you not have to suffer through a tiresome documentation process but you will also be able avail the loan instantly without any collateral. Yes, PaySense provides loans up to INR 2 Lakhs without any collateral. Moreover, the education loan repayment on loans is made easier as you can use the EMI calculator to ascertain the best value of the loan before applying. If you are applying to a bank for loan then you should know how they calculate the EMI for an education loan.
Apply for Loans of upto ₹5 Lakhs easily using your phone or laptop, and pay back on low EMIs