Can I Take an Education Loan on Agricultural Land?: Is it Possible?

Can I Take an Education Loan on Agricultural Land?: Nowadays, most Indian students want to pursue higher studies in abroad countries to have a bright career. But studying abroad is not cheap, it needs huge funds to finance the educational needs. So, students are opting for the education loan.

The banks offer high loan amounts with less interest rate for secured education loans only. The farmer kids have agricultural lands as the only asset they can pledge as collateral. They will get a question: Can I Take an Education Loan on Agricultural Land? Read more to know the answer with a detailed explanation.

Can I Take an Education Loan on Agricultural Land?

Yes, you can get an education loan on agricultural land. The Reserve Bank of India has suggested the banks to grant education loans to farmers and their kids. But few banks don’t use agricultural lands as collateral for education loans. It might be because the agricultural property can’t be used as collateral in the event that the student loan turns into a non-performing asset.

The main purpose of collateral is to ensure that if the applicant has failed to make repayments, then property should be claimed. The accepted immovable property for secured education loan is house, flat, agricultural and non-agricultural lands. The liquid collateral can be fixed deposits, govt bonds, or insurance policies.

Needed Documents for Education Loan Against Agricultural Land

• Property Title Deed
• Registered Sale Agreement/ Gift Deed/ Will
• Original registration receipt for the above agreement
• Latest property tax bill and electricity bill bearing the same address
• 30 years link document or previous chain of sale deed establishing title or EC is required.
• If that area has been converted into residential then a “conversion document” will be required.

How to Get a Secured Education Loan?

• Here is the detailed process of getting a secured education loan.
• Fill the application form provided by the bank.
• Submit all the needed documents at the bank’s branch.
• The bank will send the legal & valuation report along with documents to the central loan processing cell.
• The processing officer will verify your loan application.
• Once the verification is done, the loan will get sanctioned.
• You will get a loan sanction letter after paying the processing fee.

Benefits of Taking an Education Loan on Agricultural Land

These are the benefits of taking education loans on agricultural land.

• It offers a lower interest rate.
• Minimal processing fee
• Longer loan amount and longer loan term when compared with other lenders
• Moratorium period of 6 to 12 months where simple interest is charged
• Even after the moratorium period, you are allowed to miss 2 to 3 months EMIs

FAQs on Secured Education Loan

1. Who is not eligible for an education loan?

The non-residants of India with don’t have an admission letter from the institution are not eligible for applying education loan.

2. Is there any property that needs an education loan?

No, property is not mandatory to get an education loan.

3. Can I get an education loan without land?

Yes, you can get an unsecured education loan without land.

4. Why do banks reject education loans?

The reasons behind the rejection of the education loan are income documentation, poor CIBIL score, low academic performance, unrecognized course or institute, inadequate collateral and so on.

Conclusion

I hope that the details enclosed here about Can I Take an Education Loan on Agricultural Land are useful for you. Stay in touch with our site to get Education Loan Against Property and NBFC Education Loan for Abroad Studies.

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