We think that the lack of funds should not be a concern when it comes to running an educational institution. There are several options today in the market for Education Institution Loans that one can apply online to upgrade the school infrastructure, to buy laboratory equipment’s, upgrade the laboratory, and to add new facilities for productive purposes. Today, there are multiple alternatives in the financial loan market available, but before applying; there are some factors that a borrower must be aware of it:-
Does Loan Require Collateral: – Well, the loans for education institution may be secured or unsecured, whether it is for the government or private. Many lenders ask borrowers for collateral to be pledged as security, but there are some lenders who lend money on the institution model i.e. institution based financing. That means whether the educational institution is a college, school or a coaching institute, their focus aligns accordingly and provide the best financing solution. And in addition to this, for an institution that cannot afford secured loans can get a collateral free finance or education institution loa from digitally enabled fin-tech.
Loan Tenure: – Well not a single education institution would like to be debt-ridden, right? The payment of total interest gets high if you choose long term education institution loan. This is why it is advisable to check the loan tenure (usually in months) before accepting or signing any deal. There are many fin-techs who provide loans to an institution with an easy tenure. Or you can stretch the loan tenure, after negotiating with your lender so your EMI amount can be considerably reduced.
Check with Interest Rate: While taking Education Loan in India for your institution, check with the interest rate, processing fee and other additional charges associated with it. Traditionally, lenders often have low-interest rate but their processing fee, and documentation charges are high. There are Fin-techs who offer maximum loan eligibility at attractive interest rates so that your institution can progressively grow and advance.
Check with The Documents: So, when you approach a lender to get an education institution loan in India, you need to produce the documents which state the ownership of the land for your school/college. All those documents should clearly specify the name of the trustees, or the members of an institution who administer the school. The land for institution loan should not be agricultural in nature and if it is, it should get converted into the commercial or institutional land, in accordance with the norms laid down by the government.
Pre-closure Charges: Before applying for an education institution loan, you need to check that, is there any pre-closure charges or not. Whether you apply for construction of building or to buy new equipment, it is advisable to check that processing fee before paying off a lump sum. In comparison to traditional lenders, Fin techs, or NBFCs, have no or low pre-payment charges on loans.
Loan Repayment Options: Along with the prepayment charges, it is also good to check the repayment options for education institution loans. Yes, we all know that EMIs are the only way to clear off the debts, but there are some lenders, Fin-Techs who offer flexible repayment options that can be adjusted as per the convenience of a borrower.
Hope this information has been helpful! Happy Borrowing!
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