Education Loan: Blessing or Curse, Eligibility Criteria, Tax Benefits

Education Loan: Quality education is critical in today’s era. Students who have recently graduated high school look forward to taking up a college education, which also acts as an initial step towards the professional world. Quality education ensures the fulfilment of dreams by turning your aspirations to inspiration. Sometimes, for achieving dreams and goals, you need a bridge that brings you closer to the destination. For students, an education loan is that bridge.

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Education Loan: Blessing or Curse

The topic is susceptible. There can be numerous grounds for taking an education loan. In some cases, it can turn complicated and stressful, while some enjoy its perks and pay it back on time.

For someone thinking of it today, it is perfectly fine to take out a student loan if you don’t demand an unnecessary amount for personal gains. When you end up taking more than the required amount, you may collect a significant debt, which might create issues in the future when you start earning. If you are not taking it for personal advantages like shelling out pocket money, student loans offer a great deal and can benefit you.

Here are some advantages of an education loan:

Entire Education Expense Cover

An education loan covers all the costs of your course, which includes:

  • Tuition fee with hostel charges
  • Exam, Library and Laboratory fees
  • Refundable fees paid to the institute
  • Cost of books, uniform, if any
  • Travel expense

Also, most banks offer a special discount to female students.

Low-interest Rates

The interest rates of any loan are predominant in decision-making. Education loan interest rates are usually low from public sector banks and vary depending upon the financial institution if you take it from elsewhere. For students of underprivileged backgrounds, many government schemes can also help them get the lowest possible rates of interest.

Good Payment Terms

When you opt for an education loan, you also have to look into its repayment terms. Unlike most loans where the repayment period starts immediately, an education loan gives you a specific period before the repayment process starts. The period can go up to a year before you start education loan repayment, or it depends on the bank’s policy from where you have taken the loan.

Tax Benefits

It is another advantage that you get while making loan repayment. Under section 80E of the IT Act 1961, you can claim a tax deduction for the entire loan interest amount you pay. It can help save money while you are earning.

Easy Availability

Education loans are readily available as all banks and many financial institutes offer this facility. The process for applying and getting the loan is also hassle-free, which is a perk. So, you can go to your nearest bank and get it after completion of the required paperwork.

Eligibility Criteria:

Every bank and financial institution has its set parameters for providing loans, but some are common amongst all.

  • You must be an Indian National
  • You must possess an admission letter from the college or university at the time of filing a loan application
  • Applicant must be amongst 16 to 35 years age group while submitting a loan application

Education Loan: To Choose or Not to

It all depends on your choice and the course you want to pursue. One crucial aspect an education loan teaches students is to be responsible for their studies to land a job and pay the loan back.

Today studies are getting costlier, and you may not want your family to feel the burden of the same. If you know how to manage your finances and understand the importance of taking the education loan, you can go ahead with your decision to choose it. If, in any case, you are thinking of taking a little advantage of this opportunity, you may want to consider not going ahead with it.

Taking an education loan is a responsibility for the future, of which you are uncertain at the moment. So, think thoroughly and consider all its strengths and challenges you can come across to take the final call.

If you are taking the education loan, consider taking it from reputable banks like Axis bank that offers loans at attractive interest rates. It extends its services to students both in India and abroad. You can further explore the related benefits online.

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