The last few decades have witnessed the skyrocketing cost of education. The rising cost has made it difficult for parents from lower and middle-class families to fund their children’s education. This has resulted in more and more families resorting to education loans.
What is an education loan?
An education loan is money borrowed to finance higher education and/or other education-related expenses.
Who can apply for an education loan?
Either parents, student or spouse can apply for an education loan to fund higher education in India or abroad.
What you should know about education loans?
Below are some lesser-known facts about education loans:
- Student loans cover more than your just tuition fees!
Do you know student loans not only covers the tuition fees but also hostel fees, travel expenses, college deposits and even book costs? Once you get the acceptance letter from the college of your choice, submit it to the bank or lender while applying for an education loan. The loan amount will be sanctioned accordingly.
- If you have insufficient income, you are eligible for a subsidy on education loans!
If the family’s income is less than ₹ 4.5 Lakh, you are eligible for a subsidy on your loan. Whenever you start paying your loan EMIs, the government will pitch in to pay the interest. Effectively, you’ll pay only the principal. However, you need to remember that you are eligible for this subsidy only if you are studying in India.
- Your education loan gets cheaper if you are working abroad!
If you have taken an education loan to study abroad, there may be a good chance that you get a job where you’ll be paid in the foreign currency. If the value of a rupee depreciates when compared to the foreign currency, it may work in your favour. That means by paying the same amount of money you can repay more of your loan.
- You get to enjoy tax benefits!
Section 80E of the Indian Constitution allows you to claim the tax deduction for a sum equal to your interest amount. However, you need to keep in mind that this rebate can only be used to pay off the interest, and not the principal amount.
- There is no pre-payment penalty!
Most banks do not charge a pre-payment penalty if you plan to pay off your loan before the tenure ends.
- MoneyTap’s personal line of credit works as an education loan too!
- Offers you a line of credit of up to ₹ 5 Lakh
MoneyTap lets you borrow money repeatedly up to your credit limit. You can borrow, pay it back and then borrow again. This line of credit remains active for life.
- Can use the money for any purpose
Other than education-related expenses, you can borrow money from your credit line for everyday expenses like food, bills, transport and many more.
- Pay interest only on the amount used
With MoneyTap’s line of credit, you pay interest only on the amount you borrow from your personal line of credit. For example, suppose your line of credit has a ₹ 2 Lakh limit. You can borrow money as low as ₹ 3,000 and pay interest only on the amount borrowed and not on the entire ₹ 2 Lakh.
- Low-interest rate
The interest rates on a personal line of credit for education are low starting from 1.08% per month.
- Flexible repayment options
You can choose how much and for how long you want to pay. MoneyTap lets you select the EMI you are comfortable with and spread it across a loan tenure that ranges from 2 to 36 months.
Don’t let inflation in the cost of education ruin your chances for a better education for yourself, your child or your spouse. Get MoneyTap today.