Benefits of Education Loan

Read Time:3 Minute, 40 Second

A good education promises a prosperous profession and a secure future. However, considering the inflation retain education, financing higher education can be a big hurdle. In such situations, an education loan can come in handy. You can easily apply for an online loan and get the cash disbursed into your account.

Today, there are many loan apps that offer education loans to students. This has made financing even more simpler for students. Many loan apps also offer personal loans for education purposes. You have a wide range of options to choose from.

However, if you want to finance your entire education cost, then an education loan can be your best bet. In addition to financing your education, you can also avail tax benefits on an education loan. Read on to discover the benefits of an education loan.

Benefits of Education Loan

A student loan has several advantages. Some of the biggest perks of availing an education loan are –

1. Easy Financial Management

An education loan reduces the strain of managing finances for higher education. Pursuing an MBA or an executive course can be very expensive, especially if you go to a reputed college. High education in a foreign university also brings a huge financial burden on the family. But with an online loan for education, you can easily take care of your education expenses without draining your savings.

2. Pay after the completion of your course

This is probably the biggest advantage of an education loan. The loan EMI does not begin until the completion of your course. In addition to this, you get a further moratorium period which is either one year of completion of your course or six months of joining a job, whichever is earlier.

3. A Wide range of expenses are covered

Just like a personal loan, an online loan for education can also be used to cover a wide range of expenses. This includes your tuition fees, travel expenses, accommodation and hostel fees, study material, laptop, food expenses, living expenses, and much more. An education loan covers almost every necessary expense that a student might face. Today, you can choose from a range of customized loan offers, with loan apps offering the most flexible features.

4. Lower Interest rates

The interest rates levied on the education loan is lesser as compared to a personal loan. Also, some lenders may provide an additional concession of 0.5% to all female students. In addition to this, the government of India has introduced several education loan interest subsidy schemes. These subsidy schemes include a waiver of the education loan interest charged during the moratorium period.

5. Tax benefits on education loan

Under section 80 E of income tax, the loan applicant or the co-applicant can avail education loan income tax exemption. The co-applicant can proclaim a certain percentage of the interest paid towards the education loan as deductible from the total income.This further brings down the total loan burden. In addition to this, you can further avail TCS (Tax collected at source)benefits if you have availed an educational loan to study at a foreign university.

6. No need to liquidate valuable assets

One of the most common ways of arranging funds for education is liquidating assets. Parents often sell their property, land or flats, to afford higher education. Another option was breaking FDs, bonds, or selling stocks. However, with an education loan, you can retain your assets and earn further interest on them.

7. Repayment period

The repayment of education loans is made easy with a loan tenure of up to 8 to 10 years for Under Graduate. For Post Graduates, the loan tenure is up to 10 to 12 years. The loan tenure begins after the completion of your course. You can choose a tenure as per your affordability and minimum expected salary.

Final Thoughts

Nearly all banks provide education loans to students looking to fund their postsecondary education. An education loan has a lower interest rate than a personal loan. Loans for education often have longer payback terms. After completing your course, you will need to pay after six to twelve months.

Today, with various digital lending options and loan app options, it is quite easy to apply for an online loan for educational purposes. You just need to fulfil a simple online application and furnish a few loan documents.