Education is a powerful tool that can open doors to a brighter future. However, with the rising costs of education, many students and their families face financial constraints when it comes to pursuing higher studies. In such cases, education loans can be a viable solution to bridge the gap between aspirations and affordability.
You can apply for an online education loan while also sitting in the comfort of your home. One can apply for an education loan for a maximum duration of 20 years at an affordable interest rate, which starts from 7 % and varies from bank to bank. It may go up to 16% also.
An education loan is an unsecured loan or financial assistance a student gets from the bank or any financial institution. The loan can be availed by not only your parents but also by other adult relatives who are your legal guardian. Loans could be applied for admission to secondary schools, military elementary schools, and religious, private, or non-public schools across the country. Parents and siblings can be co-applicant(s) in an Education Loan.
What are the different types of Education loans in India?
Domestic Education Loan – It is applicable when you are pursuing an educational course within geographical limits. The loan will be approved on getting a secured seat in an institute that meets the requirements of the lenders.
Study Abroad Education Loan – For educational courses where the student is going outside the geographical boundaries of the country.
The most popular courses for which a student applies for Education Loan in India
Top factors to consider at the time of applying for an education loan in India
The eligibility criteria to apply for an online education loan in India
Who can apply for an education loan in India?
The must-have documents to apply for an education loan in India
Features of Education Loan
List of expenses covered under education loan
Factors determining the education loan EMI
Benefits of applying for an education loan
Financial freedom starts with an education loan. Many young adults are dreaming and looking forward to build-up their education on their own terms. With the help of education, they are ready to take charge of their future and remain financially independent.
With an education loan, no need to worry about the impact of your educational expenses on family finances. If you chose an education loan to pave the way for your bright future, without dipping into your family’s savings.
If you have no credit history, you want to build the same, by opting for a student loan. You can build your credit score and credit history and enjoy better interest rates in the future.
You are also getting tax rebates on education loans; the interest payout on your education loan will be liable for tax exemption under Section 80E. Only the interest payout, not the principal amount.
The best part about getting tax exemption on an education loan is that there is no limit to the amount you can claim on the education loan. You can obtain a certificate for the same from the bank or your lender. You can claim tax exemption only for 8 years from the year you started repaying the loan until the interest is fully paid off.
The repayment tenure for education loans is usually extended, allowing borrowers sufficient time to repay the loan. The tenure can range from several years to up to 15 years, depending on the loan amount and the policies of the lending institution.he course.
You can even apply for an educational loan offline by visiting in-person to the bank. Fill out the application form and submit it with the necessary documents.
Importance of buying insurance along with education loan in India
When it comes to taking an education loan, it is essential to consider the importance of insurance coverage. While the primary focus is often on the loan amount and repayment terms, having insurance alongside your education loan provides an additional layer of financial security. Here are some key reasons why buying insurance along with an education loan is crucial:
Loan Repayment Protection: An insurance policy acts as a safety net by ensuring that the burden of loan repayment does not fall solely on the family or co-borrower. The insurance coverage helps in paying off the outstanding loan amount, relieving the financial strain on the family during a challenging time.
Financial Security for the Family: By purchasing insurance, you are safeguarding the financial well-being of your family members. In the absence of the borrower, the insurance proceeds can be utilized to repay the outstanding loan, ensuring that the family is not burdened with the debt.
Peace of Mind: Knowing that your education loan is protected by insurance brings peace of mind. It allows you to focus on your studies and career development without constant worry about how your family would manage the loan repayment in your absence.
So now there is no need to compromise on the quality of education. As there is a wise saying that Padhega India Tabhi Badhega India.
So let your dreams fly high, and don’t let financial worries come your way!
By buying an insurance plan on an education loan, you can be sure that the co-applicant is not responsible for repaying the loan in the event of your sudden demise. Though it is not mandatory, if you want to keep your family financially secure in your absence then must purchase an insurance plan on an education loan.
Your parents, sibling, or legal guardian can become a co-applicant for an education loan. A co-applicant must be the primary debtor and hold an Indian bank account that allows them to sign cheques.
You can apply for an education loan up to Rs 1 Crore subject to meeting the eligibility criteria of the lender.
No, an education loan is not interest-free, but you can claim tax exemption on an education loan. However, this is applicable only for the interest amount paid, not the entire loan amount
Yes, you can close the loan but after 6 months of loan disbursement, you have to pay off the entire principal amount along with accrued interest of 6 months.
Yes, you can get an education loan without parental income also, but only in that case, if you give collateral to the lender to compensate for the lack of parental income.
There is no doubt that the longer the tenure will be, the higher will be the interest liability. So closing off the loan early is wise, but before that, go through the lender’s terms and conditions to save yourself from paying any penalties for early loan repayment.
If you are unable to pay off your education loan, the bank will put you on the loan defaulter list. You would not be able to secure any loan in the future for a long time. Additionally, the lender will initiate legal proceedings against you and the guarantor.
The minimum age to apply for an education loan is 18 years and the maximum is 35 years. The maximum age may vary from bank to bank.
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.