The cost of rising education pinches the pocket of many. In such a case, an education loan offers a solution instead of compromising on the quality of your education. With the help of an education loan students can apply for colleges, both in India and abroad, that may fit into their budget. After finishing college, the students can repay their loans as they embark on the new journey.
Before applying for any education loan you have to know some important factors:
1) Education loan covers tuition fees, accommodation charges, travelling expenses, etc. You need to find with your lender what all it offers.
2) One needs to be an Indian citizen and have taken admission in a recognised college to be eligible for an education loan. Parents can become co-applicant if the person is not earning. For loans of higher amounts, banks generally ask for collateral to protect themselves from any default.
3) Education loan scheme allows students to take a loan for the longer term up to 10-15 years.
4) Education loan is available in the range of 6.75% to 14% depending on the bank you choose.
5) Income tax benefits are allowed on loans under section 80E of the Income Tax Act. The interest amount paid on your educational loan is eligible for deduction from your total income.
6) Loan repayment starts after the study period plus a moratorium of 6 months or one year after getting the job, whichever is earlier.
7) If due to some reason a student is not able to find a job in the moratorium period then one can apply for an extension of the tenure.