Education Loan in India and its long term benefits

Getting access to quality education should be the top-most priority of every student. Still, it may not always be possible to achieve that due to the high cost of education. However, a lack of finances should never be a reason to stop you from pursuing your education. Thankfully, you can always opt for a student loan! 

There are various advantages of student loans, like the education loan interest rate is much lesser than the interest charged on a personal loan, among others. Parents can ensure their children get a kick-start in their careers with the help of study loans. 

Let's understand the benefits of education loans in detail and why they make for an apt choice for funding your education!

What is an education loan?

With soaring inflation and consumer prices of products, it is not easy to fund education from a good institute. Depending upon the courses, you can expect to spend an amount from Rs 5 lakh to Rs 12 lakh for a graduate degree and about Rs 50 lakh for a medical degree. Business schools also charge upwards of Rs 7 lakh. Of course, costs differ from institution to institution. This cost can be exponentially higher if we talk about getting a degree from abroad. 

An advantage of student loan is that it is a financial product that helps you finance your education so that you learn the skills for your chosen profession. An education loan can be taken by a student or their parents or even the spouse of a student on behalf of the student. 

What is included in an education loan?

The total loan amount you will be granted depends upon the fee structure of the course to be pursued, your profile as well as the co-applicant’s income. Also, the total amount that can be availed as an education loan includes the following:

• Course fees 
• Accommodation and travel expenses 
• Study material and other equipment costs

What are the benefits of education loans?

Low interest rates

While personal loans are becoming popular and may seem the likely way to fund your education, the simple truth is that you may end up paying unnecessarily more out of your pocket. This is because the education loan interest rate is lower in comparison with the interest rate charged on other loans. With IDFC FIRST Bank's Education Loan, you can avail student loan at attractive interest rates, starting at 8.5% per annum and avail 100% education finance within no time!

Variety of courses

You can get a student education loan for different types of courses or degrees, not just in India but also abroad. This is especially helpful for students who desire to study out of India but are apprehensive because of the high course fees and other ancillary expenses. For example, with IDFC FIRST Bank Education Loan, more than 18,000 courses are covered across 25+ countries, along with 3200+ universities! Furthermore, IDFC FIRST Bank ensures to make your journey hassle-free through a seamless application process and get fast education loan. 

Flexible repayment options

Most loans require repayment of EMIs along with interest amount every month, unlike private student loans. Usually, the moratorium period for a student loan is for long term and is considered till the course duration is complete plus an additional grace period. Generally, the student has to start paying EMIs within six months after getting a job or one year after completing the course, whichever is earlier. This is an excellent opportunity for the student and their family to better manage their expenses and not worry that they have to repay the loan amount immediately. The student can always opt to start paying EMI’s immediately or can choose only to pay partial or full interest amount being accrued during course duration, giving them a flexible repayment option.

Tax benefits

The importance of education loans can be understood from the fact that they can help you save tax as well. The interest paid on a student loan is fully deductible under section 80E of the Income Tax Act, 1961. You can avail of this deduction on interest payments for a period of up to eight years, which usually covers the entire duration of the student loan. Education loans in India come attached with attractive income tax benefits.

Self-dependence

Taking an education loan can teach you the importance of practicing financial planning as the students themselves are responsible for paying off their study loans. You can free your parents from any financial burdens and become self-dependent, start budgeting for monthly EMIs and look after managing your expenses as soon as you start working.

Easily available

Education loans are readily available for all college students. They can approach any bank of their choice to avail themselves of an education loan. IDFC FIRST Bank Education Loan helps you enroll in your dream institute by helping you with timely financial aid. Besides, it offers fast education loan sanction via a seamless application process that lets you focus on other essential aspects of your education journey stress-free.

How can you strengthen your credit history with an education loan?

Regular loan payments can help students build their credit history. Building a solid credit history through education loans can be helpful when you are trying to accomplish other life goals like buying a house or a car through loans. Having a proper EMI repayment plan can help the students in achieving a better CIBIL score

What are the pre-conditions to apply for education loan in India?

Here are certain prior important conditions to be met to avail an education loan in India,

• You need to clearly specify the fees of the course and other expenses involved
• You need to have a co-applicant which can be either one of the parents of the student or their spouse or their sibling or any legal guardian
• Co-applicant’s income details are generally required to avail an education loan
• Insurance is a must for pursuing a course out of India

Conclusion

Education loan is one of the important financial products for any country's growth and development as it helps students give wings to their dreams, who are ultimately the future of any nation. 

IDFC FIRST Bank's education loan is your doorway to the dream education of your choice. You can apply for an IDFC FIRST Bank education loan online through the FIRST Uni app (android only). This app enables you to explore various colleges, courses, and scholarships that can help you pursue your dream. You also get personalised support through a buddy and can connect with expert counsellors for writing SOPs, building Resumes, test-preparations, and a lot more.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.