5 Benefits of taking an education loan for higher studies

 

Do you aspire to study at a reputed educational institute for your higher education? Then you will have to arrange money to fund your education. But only a few students can manage to rummage around in their savings and come up with enough funds to do that. Other students have to borrow money for their higher studies. Irrespective of whether or not you have money to fund your higher education, this article will help you understand the benefits of taking an education loan.

 

 


 

  1. Saves your assets

Students do not have to use up their parents’ assets to pay for their education. They can rely on savings they or their parents made for their education. But if they do not have those savings, they can opt for education loans. Education loans will save their family’s financial assets from being used up for their higher studies. They can—once they get jobs—pay back their education loans through monthly installments.

 

  1. Covers all expenses

If the student aims to get higher education beyond the limits of the home city, he or she will need money to pay for travel, lodging and boarding, the library fee, the examination fee, stationery expenses, and so on along with the university tuition fee. An education loan will cover all the student’s higher education loan costs holistically.

 

  1. Moratorium period

Moratorium period is a grace period offered to the borrower. It lasts until 1 year from completion of his or her degree or 6 months from getting his or her first job, whichever comes earlier. The student can use this grace period to stash savings for pulling off the first few EMIs or can use this period as a breather before starting to repay education loan.

 


 

 

  1. Avail tax benefits

According to the section 80E of the Income Tax Act, the student gets tax benefits on the interest of his or her education loan. This period lasts as long as 8 years from the starting of repayment of his or her education loan or until the whole debt is paid off, whichever finishes earlier. Thus the student saves money overtime which he or she can use to build assets for future use.

 

  1. Helps develop good financial habits

Once a student takes an education loan, he is supposed to pay it back, right? When the student gets his or her first job, he or she can start repaying the loan gradually. This will inculcate good financial habits in the student. Apart from that, the student will be able to build a good credit score also if he or she wants loans in future.

 

So, here are the 5 benefits of taking a study loan. We advise you to look carefully at the eligibility criteria of different lenders before deciding to take an education loan from them. Consult a financial advisor to understand every aspect of the education loans and make a sound decision regarding your education loan. We wish you all the best!

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