Education Loan Details: This shows very need to understand the integrities and important details while taking or applying for an education loan. The above data clearly indicates that there has been a rise in costs and expenses of education abroad. The rise in expenses has been spiraling in nature and has led to education inflation.
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Education Loan Details
Foreign exposure is considered a boon for the students these days. With a 1-2 year experience of education, in an altogether new country, with a new culture, new atmosphere and new people enables the students to gain a lot of new skills. Students not only gain more and advanced knowledge of their subjects but also learn some important life skills. The students become more independent in their approach towards their careers. Hence it is just like a dream come true for students to gain an opportunity to study in some of the prestigious foreign universities.
To be able to fund the expenses of education abroad it is very important that people start saving for this huge project at a very early stage. Saving early would ensure that the power of compounding would lead to a very quick and sufficiently large amount of money saved to be easily able to fund one’s dream education plan. However, despite starting early, one can still fall short of the required corpus. This is where education loans come in.
Education loans support the people to bridge the gap between the expected amount that they must have saved and the amount that they would finally require to fund their education. This happens because parents or students might only include expenses of hostel, exam, and tuition in the beginning; but many other expenses arise once a student enters this phase of education. It takes around 6 months for a student to look for a job after the completion of the course. It is important to fund the living expense during this period and hence, education loans come to the rescue.
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Education Loan Application
There are some very important points that one must consider while applying for an education loan.
- Tax rebates:- Tax deduction under section 80E is the main advantage of an education loan; the entire interest can be deducted under this section.
- Interest rates:- It is important to carefully consider the interest rates offered by various banks or financial institutions. Banks reduce interest rates if the loan is repaid during the period of the student’s education, and also banks offer lesser interest rates for admission to prestigious universities abroad.
- Guarantor of the loan:- The money repaying capacity of the loan will also have a role in deciding the interest rate. Hence it is important to take into consideration the money repaying capacity of the guarantor.
- Another important factor would include the duration of loan repayment. These days the duration has been increased to 15 years. There is no re-payment penalty and hence a longer duration enables the students to repay the loan themselves.
- Lastly, one needs to keep all the documents ready in advance and apply for the education loan, 6 months in advance so that the process is complete by the time of admission application.
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Lastly, it is important to consider one’s decision of studying abroad and the choice of course very carefully and then decide upon the requirement of the loan. Also one needs to keep the future income expectations in mind and decide the above-mentioned factors.