Every kid needs a high-quality education. However, as college tuition continues to rise, it is becoming increasingly difficult for all students to afford a high-quality education. Education is becoming increasingly costly in India and throughout the world.
Here are two important characteristics of an education loan:
- After you have taken out the loan, you are entitled to an income tax deduction under Section 80(E)
- If you are a female student, you will be eligible for a lower interest rate on an education loan.
Amount Available as an Education Loan
An education loan covers the cost of your course as well as any other fees associated with your education, such as study materials, lodging, travel expenses, and equipment costs. The amount of loan that you can obtain will be determined by the course tuition as well as your family’s overall income.
Who is eligible for an education loan?
All students can apply for an education loan with the help of guardians or parents who act as co-applicants. Repayment of your school loan begins one year after the conclusion of your study, or within six months of landing a job after your course, whichever comes first.
The Advantages of Education Loans
- Suitable for everyone: Any student who wishes to further their studies may apply for an education loan. Even the most economically disadvantaged members of society can get education loans through government-sponsored subsidy schemes such as the ‘Central Scheme to Provide Interest Subsidy’ (CSIS).
- All courses are applicable: Education loans can be utilised to study any sort of education – graduation, post-graduation, certificate courses, vocational courses — in India or abroad.
- Easily accessible: Education loans are readily available and simple to obtain. According to the RBI’s recommendations, they are a priority product in all banks.
- Loan amounts vary: Banks might provide loans ranging from Rs.2 lakh to Rs.22 lakh for education in India. Of course, the loan amount is determined by the course requested. The loan amount for studying abroad might reach Rs.20 lakh.
- Aids in the completion of education: The cost of education is rising as a result of inflation and shifting pricing. Education loans are becoming increasingly important in order to avoid academic setbacks.
- Advantages: Education loans come with a variety of extra benefits such as caution deposits, library fees, building deposits, laboratory fees, tuition, examination costs, hostel fees, money for purchasing books, instruments, and uniforms, travel expenses for studies abroad, and so on.
Female students have lower interest rates on loans.
- Easy repayment: Another significant advantage of an education loan is that the loan amount does not have to be returned immediately. The payback period might last up to 5 to 7 years after the course is completed. This makes repaying simple.
In India, the following conditions must be met in order to qualify for college loans:-
When applying for a loan, several fundamental standards must be met. The following are the conditions:
- The primary variables are the course costs and the applicant’s yearly family income.
- There must be a co-applicant, who can be either a parent, a sibling or a spouse.
- A guarantor or security is not required for loans under Rs.4 lakh.
- A third-party guarantee is required for loans over Rs.4 lakh.
- Collateral is required for loans of more than Rs.7.5 lakh.
- Because the loan amount alone is insufficient for studying overseas, students must additionally hunt for part-time employment or sponsorship.
- Studying abroad necessitates the purchase of insurance.