Have you ever thought of pursuing some higher studies but couldn’t pursue it because of financial problems? Do you want your child to send abroad for further studies but financial scarcity stops you? If these are some problems that hinder your aspiration from further studies then you need to know the benefits of education loan that can be borrowed. Let’s discuss this.
What is Education Loan?
Many of us aspire to become professionals like Doctor, engineers, Business Masters, etc and for this, you need to enroll for specific courses. Not only these courses are tough but very expensive too. So many of them that have financial problems couldn’t afford to pursue their dream. But not nowadays, because education loans not only cover the tuition fees of the course but also other expenses such as rent, cost of living, books, etc. So let’s see what are the other benefits of education loan
Benefits of Education Loan?
- Tax Benefits – Person availing the loan can avail the deduction of interest on education loan in his income under section 80E of Income-tax Act.
- Covers all expenses- As I said, education loan not only covers tuition fees but cover books cost, uniform costs, hostel expenses, traveling expense, exam fees, etc.
- Repayment facility – Students availing education loan have the facility to repay the loan after they complete their course. This helps the students to concentrate on their studies rather than worrying about repayment.
- Moratorium of Loan- Some institutions also provide moratorium to students where students are given holiday periods of 6 months to 1 year after course completion to start repayment of the loan.
- Attractive interest rate – Most education loans are provided at attractive interest rates which are less than personal loan hence a preferred mode of loan for education. In fact, female students are offered a 0.5% discount on the interest rate on education loans.
- Loan approval certificate- Many institutions provide loan approval certificates which indicate to the prospective university/college about the financial soundness of the candidate.
- Long-period approval- Education loan term varies from 5- 10 years thus giving the borrower long enough time to repay as per his convenience.
- Foreign education- Not only it supports indigenous courses but foreign courses too.
Courses for which Education loan can be availed
Following are the courses for which one can avail the education loan
- Graduation and post-graduation courses like engineering, medical, management, architecture, hotel management, etc.
- Vocational or technical courses – These are usually known as technical courses and involve more practical training than academics. Institutes like ITI, polytechnics do provide such courses. One can avail loans for such courses too.
- Diploma – Nowadays various diploma courses are available like diploma in HR, IT, Management, etc.
- Other non-academic courses such as filming, photography, acting, etc are also financed by loan institutions.
Criteria for availing Benefits of education Loan
To avail the beenfits of education loan, one needs to fulfil the following criteria.
- An applicant should be an Indian citizen
- One needs to possess a document which confirms admission in the college/university at the time of availing the loan.
- The applicant should be in the age group of 16-35 years.
- Documents required
- Identity proof
- Residence proof
- 2 passport size photographs
- Expenses for the course
- Bank account statement for the last 6 months
- Mark sheet of test exam
- Papers validating the scholarship, if any.
- Visa approval (for courses abroad)
- Study permit (for courses abroad)
Things to note before availing Education Loan?
Just make sure the following things before availing education loan
- Keep the set of documents required for the loan ready to avoid any last-minute rejection by the institution
- Don’t approach one institution or at least try to check the interest rates of various institutions to avail the best rate for your loan.
- Check out the terms and conditions properly to avoid any disputes or problems in the future. Only interest should not be the criteria to select the lender.
- Look for the lender who can give you the maximum moratorium period so that before repayment you are financially independent.
- Check the foreign policy, in case of pursuing a course abroad, to avoid any foreign policy complication and breach.
So guys hope you find this article “Benefit of Education Loan” informative and interesting.
I would request to share this article on your social websites to gain maximum views. Also, don’t forget to like the article. I would be eager to answer your questions so feel free to ask those in the comments section.
Check out my other finance blogs
Check out my book