5 major benefits of educational loans!

Many students dream of pursuing higher studies abroad for better career prospects. Sadly, the rising cost of tuition and boarding often stands in the way of these dreams. Now, thanks to educational loans, flying to foreign shores for higher studies is a very real possibility.

Now, we are all aware that educational loans cover the cost of tuition. Yet, did you know that these loans have many more benefits to offer you? Read on to understand a few more benefits of education loans that you perhaps were not aware of.

1) Protects your savings

This might seem like an obvious benefit, but it deserves mention due to its extreme importance. Educational Loans provide financial aid for your child’s studies and save you from the hassle of paying for fees upfront from your savings. Furthermore, these loans also eliminate the need to liquidate assets like property, gold, fixed deposits, and so on. Taking an education loan will let you save your cash for when you need it the most – such as a medical emergency.

2) Provides additional coverage

Educational Loans cover more than just tuition fees. They provide for the extra expenses that arise apart from the basic course fee such as travel expenses, study material, library charges, laptop charges, accommodation, and more. Most financial institutes fund up to 90% of the overall cost involved in your education.

3) Gives tax-benefits

According to Section 80E of the Income Tax Act, a higher education loan qualifies for tax benefits. As part of this provision, you can claim a tax deduction for the entire interest on your education loan. You can avail of this benefit for up to 8 consecutive years. Do note that this benefit does not apply to loans taken for school education and only for college courses.

4) Has a moratorium period

The moratorium period is the grace period given to the student after they complete their course. During this period, students are relieved of the burden of repaying their educational loans as they search for a job or start to get settled in life. Usually, the duration of moratorium ranges from 6 months to 1 year, starting from the date of completion of the course. However, you have the option of beginning repayment during the moratorium period so, it is not compulsory but rather a benefit that you can use wisely.

5) Boosts your credit score

If you pay back your education loan on time, it will reflect positively on your credit score. This will help you get another loan even more easily in the future.

Higher education is the gateway to a better future. So, do not let the lack of finances stand in the way of your dreams. Speak to a bank or financial institution today to discover the options of education funding you can get access to. Do your research well and choose the loan with the best interest rate. We hope this article will help you.

All the best.