Both educational loan and loan against property are secured loan forms, which allows individuals to borrow money, certain points differentiate the two.
Let us learn about them.
Loan against property Vs Educational Loan
1. An educational Loan is a future loan, where the risk of payment is dependent on the academic profile of the student. Education loan is offered considering the income of both the parents as well as the student.
2. In Education loan, Section 80E of the IT Act allows the parents to deduct the interest component from their income, the same is not possible for loan against property.
3. Education loan is under the priority sector that has to be 40% of the entire loan profile, same however is not true for loan against property.
4. The interest in case of loan against property is paid as soon as the loan is drawn, however, for an educational loan, the interest payment starts after the student has found a job. This may vary based on the institution from where you are borrowing.
5. Education loan is offered for financing the tuition fee of a college, whereas loan against property can be used for any purpose like wedding, buying a vehicle, education, vacation, medical expenses etc.
With so many differences, one can choose to opt for an educational loan or loan against property based on their requirement.
Conclusion
Various lenders are offering both educational loan and loan against property both offline as well as online. Based on your requirements and the loan terms being offered make sure to choose the right lender.
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