Higher education can be extremely costly when one pursues his/her studies from an institute of repute. It would, therefore, be wise on the part of the parent/s to plan in advance. In the present time, an education loan has become almost necessary for parents to give higher education to their children. Such loans are generally granted to meritorious students whose family members do not have the capability to fund their education on their own. An extremely important benefit of education loans in India is that the bank or financial institution will give a person time after completion of his/her course to get a job and then repay the loan.
The eligibility criteria for getting an education loan are as follows:
• Firstly and most importantly, the candidate has to be an Indian National.
• The person must have gotten admission via an entrance test for a higher education course in an institution of repute in India or in a foreign country. However, if the student has taken admission in an institution without sitting for an entrance test, the bank can decide on the criteria of employability and also take into account the reputation of the college/university.
• Generally meritorious students are given this loan even if they get admission under management quota.
One of the most important benefits of an education loan is that interest that is paid on loan can often be subtracted from your income and this helps to reduce the amount of tax that you have to pay. This benefit traces its origin from Section 80C of the Income Tax Act. The tax deduction is on the income tax filing and not on the other taxes paid.
Some other benefits of an education loan are:
• A person is not required to pay any early repayment fees for his/her student loan.
• You can take advantage of lower interest rates if you make your loan repayments on time.
• These loans are very flexible in the sense that individuals can take their time to repay the loan. However, the interest to be paid increases if someone takes a longer time to repay the loan.
• You do not need to mortgage anything while availing an education loan. However, a guarantor is generally required.
• Depending on the discretion of the bank, a student loan can also cover tuition fees, travelling expenses and even hostel fees.
• Education loans can be taken to pursue different courses like diplomas and other professional courses as long as they are taken from a bank or financial institution for the purpose of higher education. Necessary documentation may be required to be furnished to the bank.
The RBI has fixed some ceilings regarding the maximum amount that a person is eligible to get as an education loan. For studying in India, the maximum amount that a person can get is Rs 10, 00,000. On the other hand, the maximum limit is Rs 2000000 for students who want to study abroad. Education loans are one of the best options for meritorious students to continue their studies.
The eligibility criteria for getting an education loan are as follows:
• Firstly and most importantly, the candidate has to be an Indian National.
• The person must have gotten admission via an entrance test for a higher education course in an institution of repute in India or in a foreign country. However, if the student has taken admission in an institution without sitting for an entrance test, the bank can decide on the criteria of employability and also take into account the reputation of the college/university.
• Generally meritorious students are given this loan even if they get admission under management quota.
One of the most important benefits of an education loan is that interest that is paid on loan can often be subtracted from your income and this helps to reduce the amount of tax that you have to pay. This benefit traces its origin from Section 80C of the Income Tax Act. The tax deduction is on the income tax filing and not on the other taxes paid.
Some other benefits of an education loan are:
• A person is not required to pay any early repayment fees for his/her student loan.
• You can take advantage of lower interest rates if you make your loan repayments on time.
• These loans are very flexible in the sense that individuals can take their time to repay the loan. However, the interest to be paid increases if someone takes a longer time to repay the loan.
• You do not need to mortgage anything while availing an education loan. However, a guarantor is generally required.
• Depending on the discretion of the bank, a student loan can also cover tuition fees, travelling expenses and even hostel fees.
• Education loans can be taken to pursue different courses like diplomas and other professional courses as long as they are taken from a bank or financial institution for the purpose of higher education. Necessary documentation may be required to be furnished to the bank.
The RBI has fixed some ceilings regarding the maximum amount that a person is eligible to get as an education loan. For studying in India, the maximum amount that a person can get is Rs 10, 00,000. On the other hand, the maximum limit is Rs 2000000 for students who want to study abroad. Education loans are one of the best options for meritorious students to continue their studies.
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