Education loans will help the student to get a step closer to his/her dream career as there are numerous benefits of student loan.
Advantages of taking an education loan
1. Lower Interest rates
When taking any loan like home loan, car loan, personal loan, etc. interest rates are predominantly higher compared to education loans. The interest rates on study loans are lesser. Also, female borrowers get a special discount of 0.5% in all Government banks.
2. Moratorium Holiday- Pay after your education
This is one of the significant advantages of education loan. The moratorium period also known as the repayment holiday
3. A wide range of expenses covered
Education loan for abroad studies covers almost every necessary expenses that a student might need which includes tuition fees, travel (tickets), house rent, university fees, food expenses, living expenses, laptop, or any other apparatus required for your education.
4. Build your CIBIL score
CIBIL is the credit information report i.e. summary of your credit history till date. CIBIL score generally ranges between 300-900 where above 750 is considered as a good score.
5. No need to liquidate valuable assets
Mostly parents liquidate valuable assets to bear education expenses which eventually disturbs long-term financial goals like buying a land or a flat, children’s marriage, etc. By taking an education loan, banks retain your liquid assets like FDs, insurance, Government bonds as security and grant you a loan against that security.
6. Tax benefit- Section 80E
In Section 80E of the Income Tax of 1961, loan applicant or the co-applicant can avail of the education loan income tax exemption.
7. Independence to pay the loan
When you take an education loan, students have the responsibility to repay the loan to the lenders after their education. This certainly guarantees that the student is completely devoting his time towards his studies and focusing on his career.
8. Liberating your parents from loan burden
Taking an education loan can liberate parents from all financial burdens as the student is responsible to repay his education loan after the completion of his studies and moratorium period.
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