Why Should You Look at Education Loans?
Higher education expenditures often strain parents, especially when their child wants to study abroad. Furthermore, over the past few years, the expense of education has surged. An MBA from a prestigious university or Ivy League school can run up to Rs 1.5 crore! Parents generally become conflicted when it comes to budgeting and finance. And hence, study loans serve as the last resort and can simplify money retention.
Higher education entails hefty costs, making an education loan useful at this point, and it even comes with several tax benefits. Banks offer attractive interest rates on education loans for post-secondary, professional, or degree courses. This post will go over the benefits of student loans in depth to help you choose the best funding sources!
Reduced Interest Rates
The interest rate of education loans is generally affordable and can easily be repaid. You can obtain an education loan at a lower, individualized interest rate than a personal loan or use a credit card to reimburse for your studies. Less interest is charged on student loans to encourage decent education. Additionally, female candidates receive an additional 0.5% discount from government banks.
Moratorium Period Advantage
One of the key benefits of study loans is the moratorium period. Education loan programs have a moratorium period, unlike personal loans, where the borrower must begin making payments on the accrued EMIs in the following months.
The moratorium period is when the student is exempt from making the lender payments or the start of the EMIs. The moratorium period typically lasts the length of the course plus six months (with the option of an additional 12 months) which enables students to arrange for the required resources with flexibility!
Covers a Variety of Costs
A study loan covers nearly all the costs a student can incur to complete their education for higher studies. Tuition, transportation, housing, university fees, food, living expenses, or other equipment necessary for your studies are provided.
Tax Benefits—Section 80E
The potential borrower or co-applicant may take advantage of the income tax exemption under Section 80E of the Income Tax Act 1961 for education loans. Simply put, the loan applicant or co-applicant may declare that a portion of the interest they pay on their student loan is to be deducted from their gross income.
No Requirement to Sell Off Priceless Assets
Parents often sell off important assets to pay for education costs, which ultimately interferes with long-term financial plans like purchasing land or a home, having children get married, etc. Banks hold your liquid assets, such as FDs, insurance, and government bonds, as collateral when you take out an education loan and provide a loan in exchange for them. As a result, the loan you took to pay for your schooling would not conflict with your long-term financial objectives.
Enhances Your CIBIL Rating
The credit information analysis, or CIBIL, provides an overview of your credit history. The typical CIBIL score varies from 300 to 900. A good score is greater than 750. Education loans enhance your CIBIL because timely repayment of EMIs builds the required score and allows you to easily obtain a loan in the future, such as a home loan, auto loan, and so on.
Wrapping Up
Many students dream of studying abroad, but it may devour all their funds and require them to borrow money with hefty interest rates. However, at Eduloans platform, we offer you the opportunity to retain your savings and secure your future while also enjoying the streamlined application process for an education study loan to attend your dream university at a favorable interest rate.
Register yourself today, and fund your dreams effortlessly!