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Education Loan on a Home Loan Property

To get the best quality education along with some practical knowledge, most students are moving overseas to pursue their higher education. Aspirants are opting for student education loans to fund their abroad education. 

Study abroad aspirants can avail of two types of education loans i.e., Secured Education loans and Unsecured Education loans. A secured Education Loan brings a lot of benefits as compared to that of an Unsecured Education Loan. However, there is a common misconception among aspirants that they cannot pledge a housing loan property as collateral security for a secured education loan. But this is not the case. Such an asset can be pledged as collateral security for availing a secured overseas education loan

In this blog article, we are going to clear off all your doubts and notions about availing an education loan on the property that is already mortgaged under the home loan. 

A common misconception about Home Loan Property:

We are making it loud and clear that a housing loan property that is already mortgaged under a home loan is eligible to avail an overseas education loan. Aspirants can apply at both private and nationalized banks to avail secured education loan on a home loan property. 

Due to the lack of information about various clauses of education loans, aspirants are not aware that they can avail an education loan on a home loan property. Hence, they divert for unsecured education loan and end up paying a higher rate of interest to the bank. 

Things to be kept in mind while securing an education loan on a Home Loan Property:

Although a student can avail secured education loan on a home loan property, there are two factors that play a major role in granting the education loan from the lender company. Let us see, what those are: 

To get clarity on the education loan on a home loan property, here are some case studies. Do read carefully:

Case Studies:

1. If property market value is around 1 crore, in such case the borrower can take up various loans like home loan, business loan, marriage loan, education loan and personal loan against the mortgaged property until the limit is not over.

2. If the market value of the property is around 50 lakhs and the home loan availed is 40 lakhs. However, if parents have paid 30 lakhs of loan to date and the outstanding amount is 10 lakhs. In such circumstances, the student is eligible for an extension of a loan on the same property. 

3. If the market value of the property is 1 crore, the bank will sanction 75% i.e. 75 lakhs of the loan amount against the property. For instance, a borrower has recently availed a home loan of 40 lakhs on the mentioned property, he/she is still eligible to get the loan of 35 lakhs on the same mortgaged property. Such cases are termed as extensions of loans.  There is no need to do the valuation report and search report as it is valid for 2 years and 3 months, respectively. 

4. Students can avail secured education loan on the same mortgaged property if in case his/her sibling has already availed an education loan for overseas education, provided there should be the availability of balance amount on the mortgaged property as of date. 

5. If there is an ongoing home loan of the parents in a public sector bank and if their child wants to avail an education loan for his/her overseas education and the chosen university falls under the Bank of Baroda Prime listing, he/ she will be eligible to get 100% funding. Secondly, as per the visa criteria, most of the countries ask for pre-visa disbursement of tuition fees and living expenses. Hence, transferring the ongoing home loan will fulfil both the conditions.  

6. Most of the public sector banks deny pre-visa disbursement of an education loan. In such cases, if a borrower has already availed a home loan and has an outstanding balance of around 2-3 lakhs, it is recommended to pay the outstanding amount. Once this is done, the borrower is required to take a No Objection Certificate (NOC), loan account statement stating NIL balance, and release the original mortgaged title deed. 

7. If there is an ongoing home loan in any public sector or private sector bank and the student is willing to avail of an education loan from the same. It is advisable to check all the related factors like quantum of finance, rate of interest, loan margin, tenure, processing fees, etc. If the bank fulfills the criteria of the student as per the cost project, then a student must go for it otherwise he/she can opt for another bank. For instance, the cost project for the student is 47 lakhs, and the borrowing limit of the bank is 25 lakhs. In such a case, the student must think of considering another bank. 

Hence, it is always advisable to take financial assistance and guidance from the education loan experts. Elan Loans is here for your rescue. Know how we can help you.

How ELAN Loans will help you? 


ELAN Loans has partnered with 10 financial institutions, including government banks, private banks and international lenders that make it easier to avail an overseas education loan from the bank. 

Being the partner company, ELAN Loans has complete authority to do as many follow-ups as required and to directly interact with the bank managers to speed up the loan application process. 

Hence, we would recommend you get in touch with our financial experts at ELAN Loans and be assured. We will get the complete overseas education process done for you while you can start planning for your new beginning in a foreign land. 

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