Education Loan on Agriculture Land
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Indian Banks and NBFCs do not accept agricultural land as collateral against an education loan. According to the rules, such land is legally mandated to be used only for agricultural purposes. Student loan providers accept residential or commercial properties, financial assets, or fixed deposits as collateral for education loans.
A large number of Indian families are mainly dependent on agriculture. There are some conditions if a student from such a family wants to borrow an education loan against agricultural land. The hands of Banks and other lenders are tied due to the rules related to education loans against agricultural land. In this blog, we will help you to understand the required information to borrow an education loan as a farmer’s child.
Check Out Relevant Blogs:
- Education Loan on Agricultural Land
- Can I get an Education Loan on Agricultural Land?
- Alternatives to Agricultural Land Mortgages for Education Loans
- Options If Collateral Not Submitted
Education Loan on Agricultural Land
Higher education is seen as a ticket to a secure job in India. However, with the cost of education inflation presently estimated at 10%, it is understandable why higher education is becoming an expensive endeavour and why many students are forced to abandon their aspirations of continuing their education. An education loan comes in handy in these situations for students who want financial assistance to achieve their ambition of attending any university.
Education loans on agricultural land can also be considered as collateral in certain cases. This presents a unique opportunity for students from agricultural backgrounds to pursue higher education abroad. Also, this can reduce education loan interest rates. However, this depends on the policy of the bank.
Can I get an Education Loan on Agricultural Land?
No, is the answer to this query. If we look a bit closer, we see that this is not actually feasible. The RBI has recommended that banks grant education loans to farmers and their children, but in practice, things are very different. All public banks, commercial banks, and other education loan providers in India do not accept agricultural land as collateral for student loans when we examine the terms and conditions for authorising a secured loan.
The fundamental purpose of collateral is to ensure that the funds are repaid in the event of default. Since agricultural property would not be used as collateral, the purpose of requesting it would be defeated. Collateral is meant to be a way of recouping loan funds if the borrower defaults on the loan.
Note: It is vital for students looking to study abroad not to miss out on the opportunity to study at their dream university abroad. Students may apply for education loans provided by leading lenders through Shiksha Study Abroad.
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Alternatives to Agricultural Land Mortgages for Education Loans
Following are some alternative methods that a student can get a secured school loan now that we are aware that it is not logistically viable to do so on agricultural land:
- Any Other Property: Find another piece of security (property or land) to provide with your education loan application. Make sure such property should be owned by any family member or guarantor who is willing to mortgage it for your education loan.
- Other Collateral Security: Students may also pledge intangible assets including life insurance policies, mutual funds, national savings certificates, fixed deposits, government bonds, and government bonds, among others. The assets could be held in a relative's or even the student's name.
- Jewellery: Gold or diamond jewellery can also be mortgaged by students to pay off their student loans.
It should be mentioned that the value of the pledged collateral must be equal to or greater than the requested loan amount. As a result, a borrower may attach more than one of the aforementioned collaterals if the value of one is less than the loan amount sought.
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Options If Collateral Not Submitted
There is still hope for students who are unable to acquire any of the aforementioned forms of collateral in the form of unsecured student loans. Most lenders provide worthy students with unsecured loans. For deserving students, certain lenders, such as private banks and NBFCs, even increase their maximum lending amount for an unsecured education loan.
There are a few additional things that you need to keep in mind:
- Almost all NBFCs demand that you pay a small amount of interest every month (between 3 and 5 thousand) while you are studying.
- Bank interest rates range from 8% to 12%. NBFC interest rates range from 10% to 15%.
- The credit team will examine your student profile, job history, financial situation, scholarship offer from the university, and region of residence to decide whether to approve or deny your loan application.
- Processing charges range from 30,000 to 60,000.
- Because the interest rate is not fixed, it may go up or down depending on how the government's policies change for your loan.
If you have any queries, feel free to ask, and we will be happy to answer. You can either drop your query in the comment box below or connect with Shiksha Study Abroad Counsellors.
Commonly asked questions
University of Lancashire and University of Nottingham are some of the most prestigious in UK and students across the globe desire to study here. In terms of tuition fee, University of Lancashire is more affordable. However, the Uni of Nottingham is lesser selective.
A comprehensive comparison between both universities:
| Parameters | UCLan | Nottingham Uni |
|---|---|---|
| Annual Fees (MBA) | INR 14 L - 19 L | INR 21 L - 32 L |
| Acceptance Rate | 22% | 11% |
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University of Lancashire accepts country-specific qualifications from overseas applicants. Indian candidates who wish to pursue their higher studies from the university, must meet the University of Lancashire admission requirements for Indian students listed below:
Undergraduate Requirements:
- Higher secondary school certificate
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Graduate Requirements:
- Bachelor's or Master's degree in relevant field;
- Overall score of 58% in bachelor's degree (80% for excellence scholarship) or 55% in master's degree
- 65% - 75% in Standard XII English (IELTS 6.5 equivalent)
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