Want to send your children for higher education? Don't forget to apply for Education Loan
By Anupama Deshpande | October 6, 2017

As a parent, it's always your responsibility to give your children an opportunity to get higher education or professional education, no matter in India or abroad as it changes the entire life of your loved ones. Higher education has become a very costly proposition now-a-days & not an easy task even for an average earner. For wealthy parents, it is very comfortable to send their children for higher/ professional studies but for others it's a quite tough task still they do every possible thing to help their children to get higher education. There may be different sources of funding higher education such as household savings, provident fund loans, money borrowed from the relatives/ friends, selling personal assets, etc. Now it is a question in a person's mind that can there be some better source of funding a higher education?

The answer is YES! It is Education Loan which can help them to get rid of every obstacle which is coming their way of going for higher education.

Education loans are offered by almost all the Indian banks to students to enable them to meet the costs of higher education or professional studies like IIT, IIM, Medical, Engineering, Management, Post-Graduate Courses, etc. Education Loan is becoming very popular now-a-days as it gives students a flexibility to get the loan now, complete the education, get the job and then start repaying the loan that to through EMIs over a period of time with ease.

In present time, even affluent persons are taking advantage of education loan for their children because of all the benefits associated with it. Even for those persons, who have sufficient savings kept especially for the purpose of education, are advised to go for education loan.

It is always beneficial to take the education loan due to following favourable points:

1. You can fulfil your dream of higher/ professional studies
2. It's very easy to get education loans with their easier terms and conditions
3. It is available at lower interest rates than other conventional loans
4. Except for taking loan for tuition or college fees alone, it can be taken for other incidental expenses like hostel charges, book costs, etc. as well
5. It can be applied online too
6. Banks usually don't require any margin or security for loan amount upto Rs. 4 lakhs
7. Deferred repayment is applicable here means you start repaying the loan after your education is complete and your have attained a job
8. Equated Monthly Instalment (EMI) option is available
9. No financial burden on ageing parents
10. Student gets a feel of responsibility
11. It's is available even for studies in abroad
12. Income Tax benefits

• Student must be a Resident Indian. If the applicant is a Non-Resident Indian (NRI), he/she must hold a valid Indian Passport
• Student should be in the age bracket defined by the respective bank
• All education loans must have a co-applicant, usually student's parents or guardian, and the co-applicant must have a regular income to repay the loan.
• Student must have a confirmed admission to the Academic Institution
• A good credit history of the co-applicant or guarantor helps in availing loan easily
• Insurance is compulsory for foreign courses

• Income tax rebate without any upper limit is available under section 80E of Income Tax Act, 1961
• A person can get exemption on the amount paid against the interest of the education loan, either for self or for his/ her spouse or children
• This rebate is available only for the amount paid as an interest on education loan and not on the capital
• The tax benefit is available only for loan taken from approved financial institutes and charitable institutes
• This deduction is available for a period of up to 8 consecutive years that begins from the year in which the interest is paid on the loan. If the loan is repaid before completion of 8 years then the benefit will be restricted to the time period that the loan was in operation

• The Government of India has introduced an Interest Rate Subsidy scheme for Education Loan for students who belong to Economically Weaker Sections (EWS) of the society. In this scheme, the Government of India will provide full interest subsidy during the period of moratorium (Course Period plus one year or six months after getting job)
• Education loan is available on an average at an effective interest rate of as low as 9.5 % (after considering tax benefits)
• Female students are eligible for upto 0.50% rebate on rate of interest on education loan as offered by majority of banks
• India's largest Public Sector bank, SBI, is offering 100% financing on its education loans for pursuing higher education in selected 120 premier institutions in India with a repayment period of up to 15 years
• Student credit card scheme is also available for those who wish to pursue higher education