Cheapest Education Loan: To continue studies, you can take an education loan at a rate of less than seven percent.
Cheapest Education Loan: If there is a problem of money to continue your studies, then you can take a loan from banks or other financial institutions for this. To continue studies, you can take an education loan at a rate of less than seven percent. With this loan, the entire cost of studies is covered and some time is also available after the end of the studies before starting its EMI so that the job can be secured. An advantage of education loan is also available in tax. The benefit of tax deduction is available on the interest paid for education loan under Section 80E of the Income Tax Act 1961.
15 years repayment period
On taking a loan for studies, its installment does not start immediately, but it starts after a period i.e. moratorium period. Usually when you finish your studies, even after 6-12 months its installment will not start and this period is given to find job after studies. The moratorium period is different for all the lenders. Usually, after the end of the moratorium period, the entire loan has to be repaid in installments within 15 years.
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Education loan can be taken at less than 7% rate
You can apply for education loan either online or offline. However, like other categories of loans, before applying for this also one must compare the interest rate and tenure in different banks. Take a final decision on comparing different tenures for multiple loan amounts. Apart from this, some banks do not even charge processing fees up to the specific loan amount and usually no guarantee is required up to Rs 7.5 lakh if the loan is taken jointly with the parents. Below are the interest rates and EMIs for a loan of Rs 20 lakh for a tenure of 7 years in various banks.
(Source: bankbazaar.com. EMI calculation does not include processing and other charges and is for education loan of Rs 20 lakh for a tenure of 7 years. Rates as on June 21, 2022 on banks’ website Accordingly.)
Why education loan is needed
Higher education is becoming increasingly expensive and not all students can use the money for it on their own. On the other hand, if you want to study abroad, it becomes more difficult to raise money because there college fees have to be paid in foreign currency and the expenses of living, lodging, travel and other needs are also to be paid in foreign currency.