How to turn your child's aspirations into reality with a child education plan

Watching your child walk across the graduation stage is one of the proudest moments in a parent's life. But when that moment arrives, will you be celebrating wholeheartedly, or worrying about how you managed to afford it?

Education inflation in India is at an all-time high, standing at a staggering 11-12% as of 2024. As college fees continue to rise, many parents are being forced to choose between financial security and giving their child a quality education.

The question then becomes—how do you financially prepare for the future? This is where a structured child education plan is helpful. Find out everything you must know about financial planning for education and learn how to secure your child’s future today!

What is a child education plan and how does it work?
 

A well-structured strategy is the key to meeting any financial goal—whether it's buying a house, planning retirement, or funding your child's education. This is why you need a child education plan—it helps you strategise the best ways to overcome the rising education costs so that you don't have to scramble for funds at the last minute.

As news about rising fees for schools, colleges, and universities becomes increasingly common, financial planning for education has become necessary. Parents need to account for various factors including the tuition fees demanded at top institutions and the rising cost of living and other expenses.

Fortunately, there are a mix of financial tools available today to help you prepare for these costs. Fixed deposits, mutual funds, insurance-based plans, and education loans are a few of the many financial avenues to help you plan for your child's future. Here's a breakdown of what these different avenues look like as well as their pros and cons.

How to plan for your child’s higher education?
 

Of all the avenues available to parents today, education loans stand out as a clear winner when it comes to funding your child’s higher education. This is because their ease of accessibility, flexible repayment options, and tax benefits make them the most practical choice.

Some reasons why an education loan is the best child education plan for your family include –

1. An education loan ensures no upfront financial burden by allowing repayments through EMIs after course completion.
2. It helps preserve your family's financial security since you don't have to dip into your investments to fund your child's higher studies.
3. A good education loan not only covers an institution's tuition but also provides funding for major expenses, such as accommodations and books.
4. An education loan helps your child build a strong credit history early, setting them up for better financial opportunities in the future.
5. The interest paid on an education loan qualifies for tax deductions under Section 80E of the Income Tax Act, reducing your overall financial strain.

How to choose the right child education plan
 

When selecting the best child education plan, there are several factors you should consider for a stress-free experience. Key aspects to keep in mind for an education loan include –

1. Loan amount
 

The first step in choosing the right education loan is determining the final amount of funds your child requires. This includes factoring in tuition, accommodation, and other expenses.

2. Repayment terms
 

Evaluate the repayment terms of an education loan, including the moratorium period (the temporary period during which repayments don't have to be made) and EMI flexibility. This ensures that the loan aligns with your financial situation.

For more details about whether a moratorium period is the right choice for you, here's a quick video that breaks it down further.

#MoratoriumSamhjo | English | IDFC FIRST Bank

3. Interest rates

Compare the interest rates of different education loans to secure the lowest possible rate and reduce the overall cost of borrowing.

4. Collateral requirements
 

Collateral requirements for education loans vary widely. Consult with various lenders to choose the option that best suits your needs.

5. Short-term vs. long-term planning
 

Consider whether you need the education loan for a short-term expense (like an international summer programme) or a long-term degree. Short-term loans may have higher EMIs but lower interest costs, while long-term loans offer flexibility in repayment but accumulate more interest over time.

If you are looking for an education loan with competitive interest rates, flexible repayment options, and extensive coverage for education-related expenses, IDFC FIRST Bank Education Loan may be your ideal solution.

Why choose the IDFC FIRST Bank Education Loan
 

If you’re looking for the best child education plan that provides financial security without causing strain, an IDFC FIRST Bank Education Loan is the right choice for you. Some of the features that make it stand out include.

1. Funding availability of up to ₹2 crore
2. Collateral-free loans available for up to ₹1 crore 
3. Up to 100% financing available for your child’s higher studies
4. Competitive interest rates starting at only 9.5% per annum
5. Flexible loan tenure of up to 15 years
6. Funding availability for other academic expenses such as travel, accommodation, and more
7. Flexible repayment options with a moratorium period, allowing EMIs to start after course completion

Sounds like the right choice for your child? Here’s a step-by-step process of how to apply –

1. Head to the IDFC FIRST Bank Education Loan webpage
2. Click on ‘Apply Now’ to open the contact form
3. Fill out your child’s name, email address, current city, planned country of study, and mobile number
4. Once you submit the details, an IDFC FIRST Bank representative will reach out to you for the next steps

Don’t let education inflation hold back your child’s career
 

With the rising cost of education, opting for the right child education plan has never been more crucial. Careful financial planning, combined with the right education loan, can secure your child's dreams without compromising your family's financial security.

Take control of your child's future and help them fly higher—apply for your IDFC FIRST Bank Education Loan today!