Education Loan

Today, most of the students pursue education with the help of education loan. It helps to reduce financial risks. Cost of education is increased yearly, so people are switching loan for their children studies. Students are choosing this loan for their higher education. However, it is tax-free for repayment. With a simple process, one can apply for the education loan online. It can be taken for any course which students like to choose after completing higher secondary education. Lots of students get benefitted by taking it from the bank.

What is education loan?

It is granted to the student to pursue higher studies without any financial risks. Students can achieve their studies at a cheaper cost with this loan. Students can borrow loan for undergraduate or postgraduate course such as management, engineering, medicine, architecture, and more. It can be taken by students or parents to continue higher education. Most of the Indian families prefer to take education loan to pay fees for their children’s higher education.

Documents needed to get a loan

If you are looking to borrow education loan from the bank, you must keep these documents ready to receive loan easily.
  • Proof of residence
  • Take two passport size photos
  • Identity and age proof
  • Last six months statement of bank account
  • Expense of pursuing course
  • Confirmation letter of the course admission

Salient features of education loan

Typically, it decreases the expense of spending money to your children education. Based on a government plan, banks offer loan to the borrower. Some banks provide seventy-five to ninety percent amount of student’s course fee as education loan. Government banks give lower interest rate for repayments. Majority of banks process loan applications online. These banks allow submission of mandatory documents online. It reduces paper work and saves a lot of time for the parents. To know more details about the loan, you can contact us or visit your nearest bank branch.

Consider interest rate

Borrowing any loan by a bank or financial institution, an interest rate is a necessary option. Customer first checks interest rate before taking the loan from the bank. It is varied between nine to fifteen percent. EMI usually starts after the moratorium period (waiting period). It is differs from bank to bank and course to course. Some banks offer a discount for female applicants on repayment.

Get tax benefits

When students submitting documents for tax deduction they need to pay past year of the loan amount on the required bank. Parents can avail tax benefits on the amount of loan repaid every year. They would need payment receipts from bank for this. Mostly, repayment of education loan is processed on an installment basis (EMI). The monthly installment amount helps to reduce the stress of paying high amount to the bank.

Guarantor

Are you pursuing higher education in Abroad? Then you have to submit mandatory documents. In some cases, the bank asks security of the third party to take loan amount. Without security, banks provide a loan to students up to 7.5 lakh.

Eligibility criteria

Now, banks are offering loans to students according to eligibility. If you pursue your studies within the country, age limit is 16-35 years to be eligible to apply education loan.

A process of education loan

It helps to achieve the goal of education for every student. If people start earning then they pay back the loan amount in easy EMI to the particular bank. You have to submit all necessary documents to the respective bank to get approval from the manager. If you accessing education loan then you must consider few things which are given below
  • There will be Tax deduction applicable if you have taken education loan under section 80 E
  • Full interest rate on repayment will be deductible while evaluating taxable income.
  • For repayment, there are no restrictions offered for the individuals.

Benefits of taking education loan

It is only offered for study purpose by financial institution or banks. You might find various interest rates for education loan with different banks. The loan includes expenses such as college fees, hostel fees, book, and other fees. A scheme is available for this loan up to ten lakh in India and twenty lakh on abroad.
  • It is the great option of a student who does not have sufficient amount to pursue education. By using the loan, they have opportunity to make career in the right direction. After completing the course, students have to payback loan amount in installments from their salary. They are not required to repay instantly. Banks allow students to take loan after passing a senior secondary examination.
  • One can avail lower interest rates on the education loan when compared to other loans. It is very flexible to access and can be refund without any risks. Pay small amount on regular basis to payoff theborrowed amount in the short or long time.
  • For this loan, he or she must repay fund amount in 80E of income tax act. If you would like to get a tax deduction on the loan, then you need to borrow from gazetted financial company or commercial bank.
  • Most of the bank provides 0.5% lesser interest rate for education loan to girl student.