Due to the growing competition and increasing costs for education, the need to apply for educational loans has become commonplace. If you have a computer engineering degree at IIT Bombay, it will cost around the amount. At Symbiosis which is a private institution that offers a design degree, the course is priced at around the amount, and a degree in law is around. The higher education process, thankfully, can be made easier by education loans. Their main benefit is that the EMIs begin only when you begin working! Here are a few less-known advantages of loans for education:
1. The loan can be used to cover cost of travel, book costs even college tuition
There is a widespread belief that student loans pay only tuition costs. Before you are able to apply for a loan, you must be accepted by the school you wish to attend. The acceptance letter is a vital document to submit your loan application and, consequently, the loan amount you apply for will be deemed to be acceptable. Hostel costs, cost of purchasing books, refundable deposit, and even travel expenses can be included as part of this sum.
2. People who do not have a sufficient annual income may be eligible for loans that are subsidized
If your family’s income is the government will offer an amount of money to help you pay for your loan. Once the borrower has begun paying off the EMIs and the interest is paid, it will be borne through the federal government’s behalf. This means that only the principal portion of the loan must be paid back in this instance.
3. When you start working overseas
If you’ve taken loans for international studies it is likely that there will be a chance that you’ll get work abroad that pays with foreign currencies . In this case the value that is declining of the rupee will be in your advantage.
4. Parents can benefit from tax deductions on the loan you take out
Educational loans are tax advantages. As per section 80E in the Constitution that allows for tax deductions for a amount that is equal to your interest. This lets the borrower (whether either your parent or you, as well as guardian or spouse) to ease the burden at no additional expense. Remember that this credit can be used to pay the interest and not the full amount.
5. There is no charge for the penalty for prepayment of loans
Any payment that is made prior to the date of scheduled payment is referred to as prepayment. Similarly, with loans for education, the majority of banks don’t charge penalties for early closing of the loan account. However, this applies only if the borrower continued to use the loan after an agreed-upon period.