No investment bears a higher return than the one on your education. A study loan facilitates a student to complete their education even if they are unable to afford it at present. By keeping in consideration the future earning potential of an educated individual, it helps them live up to their true potential.
Apart from purely economic reasons, there are multiple benefits associated with Education Loans, making them the apt choice for funding your education. Here’s a look at a few benefits of considering an education loan for funding your studies:
1. Low interest rates
When taking on any loan, interest rates play a predominant role in the decision. The interest rates for study loans are generally lower across the world, and in India too, can be quite low, especially from public sector banks. For those belonging to an underprivileged background, they can be even less expensive, thanks to a government subsidy that pays the interest on the loan for the period of the course studies, and up to 6 months after gaining employment.
2. Easy Availability
Loans are easily accessible to a majority of the population due to their availability from multiple sources. Along with banks – both public and private – a large number of NBFCs (Non-Banking Financial Corporations) also offer education loans with comparatively simplified processes. Many other organizations, too, help out students by offering endowment loans and benefits available to anyone who wants to pursue a higher education.
3. Good payment terms
Another important consideration before taking on a loan is the repayment plan. For most loans, you need to start paying back immediately, but considering a study loan is based on future earnings, many banks allow for flexible repayment options making it easier for students to pay back the loan themselves once they get a job.
4. Tax Deductible
The associated tax exemptions are another great benefit of education loans. The interest paid on the loan is completely tax deductible, under Section 80E of the Income Tax Act, 1961. This helps a student save some money during the repayment period.
The most beneficial aspect of a study loan is it teaches a student to take responsibility for their studies. Apart from saving their parents from a great financial burden, taking on a student loan also ensures they’re fully invested and committed to their studies.
There couldn’t be a better preparation to be an adult in today’s world than for students to fund their own higher education.