Taking an education loan can be a liberating experience, as the students becomes responsible for repayment after their studies and moratorium period. These educational financial instruments are designed for students who need extra money and want the freedom of responsibility after graduation, so their parents don’t have any worries about repayment!
When you understand the terms of the loans, you can choose any repayment payoff strategy to work well with the financial goals and your budget. In no time, you will be able to repay the education loan you have once taken.
So, if you are planning on going for higher studies or if you want to send your child abroad for advanced studies, taking up a suitable education loan can be worth it.
Liberating your parents from loan burden:
Taking an education loan can be a financial lifeline for parents, allowing them to focus on the needs of their family without worrying about money. When taking out this type or student-oriented loan, you are required by law to repay after your studies and moratorium period has ended. Given that you will start earning after studies, it will be easy for you to repay the loan amount.
Tax benefits under Section 80E:
80E of the Income Tax 1961 offers an education loan tax exemption for applicants and co-applicants. The rules are simple: if you’re applying with someone else, it’s your responsibility to claim them on your taxes and pay any applicable percentage as deductible interest–and vice versa!
This means less outgoings in cash but more resilience when repayment comes around again at month end.
No need to liquidate valuable assets:
You can liquidate your valuable assets to bear education expenses, but that doesn’t have to mess with long-term financial goals. By taking an education loan from the bank and using it as collateral for a security in return – like Government bonds or insurance policies–you retain control of these things so they don’t muddle between short term plans any more than necessary!
Always look for the education loan interest rate in India and see if there is a variable rate loan or you are dealing with the fixed rate.
Build your CIBIL score:
Credit information (CIBIL) report is the summary of your credit history till date. CIBIL score generally ranges between 300-900 where above 750 is considered good and will help you get loan easily in future if education loans are repaid timely with an excellent EMIs track record.
Lower interest rates:
Education loans are a great way to get the money you need for college, and that too at a lower cost. There’s no getting around that fact: interest rates on home, car, or personal loans tend to be higher compared with education loans because these types of loans deals depend more heavily upon your credit history than other sorts do! But what if someone needs an emergency loan? Well there is always FLEXIBILITY when it comes to education loans. Female borrowers can take advantage with 0.5% discount on education loans offered at Government banks in India where they compete against private institutions who do not provide this special deal.
Always try to get your education loans from reputed banks. This way, you will be sure to learn everything about the loan, like interest rate, due date and more, with ease. The bank employees will let you know about the rules in detail, so you are not kept in the dark!