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An education loans is a loan that is taken by students to finance their education. The loan can be used to pay for tuition fees, active expenses, and other related costs. Education loans are typically offered by banks, financial institutions, and the government.
How to Get an Education Loan?
Here is a comprehensive guide to education loans, their eligibility criteria, and the documents required for education loans. We have also listed a few helpful tips that applicants should keep in mind.
Eligibility Criteria
Any student who wishes to hunt higher education can seek financial aid after fulfilling the eligibility criteria. The criteria are not limited to individual eligibility; the lender must consider the type of course and institutions as well.
Eligible Courses
- Lenders usually offer education loans for higher degrees, such as:
- Bachelor’s degree (B.Com, B.Sc., B.A, B.Sc.IT, B.M.S, LL. B., B.E, MBBS, etc.)
- Master’s degree (M.Com, M.Sc., M.A, M.Sc.IT, LL. M., MBA, etc.)
- Doctor of Philosophy (Ph.D.) and Doctoral degree
- Diploma courses
- Certificate course
Types of Education Loans
here are the different types of education loans available in India:
- Domestic education loan: This type of loan is for students who want to pursue their education in India. The loan can be used to pay for tuition fees, alive expenses, and other related costs.
- Study abroad education loan: This type of loan is for students who want to pursue their education in a foreign country. The loan can be used to pay tuition fees, living expenses, airfare, and other related costs.
- Secured education loan: This type of loan requires you to provide collateral, such as a house or a car, to secure the loan. The interest rates on secured education loans are typically lower than on unsecured education loans.
- Unsecured education loan: This type of loan does not require you to provide any collateral. However, the interest rates on unsecured education loans are typically higher than on secured education loans.
- Co-signed education loan: This type of loan requires you to have a co-signer, who is someone who agrees to be answerable for the loan if you default. Co-signed education loans typically have lower interest rates than loans without a co-signer.
The best type of education loan for you will depend on your individual circumstances. You have good credit and can provide collateral, then a secured education loan may be a good option for you. If you have bad credit or cannot provide collateral, then an unsecured education loan may be your only option. If you have a co-signer, then a co-signed education loan may be a good option for you.
Benefits of Education Loans
some of the benefits of taking an education loan:
Access to higher education
Education loans can help you access higher education that you may not be able to afford otherwise. This can give you the opportunity to improve your skills and knowledge, which can principal to better job opportunities and a higher salary.
Build your credit history.
Repaying an education loan on time can help you figure out your credit history. This can make it easier for you to get other loans in the future, such as a mortgage or a car loan.
Tax benefits
You may be eligible for tax benefits if you take out an education loan. For example, you can claim a deduction on the interest you pay on your loan under Section 80E of the Income Tax Act, 1961.
Moratorium period
Most education loans have a moratorium period, which is a period of time during which you do not have to make any loan repayments. This can give you time to find a job and start earning an income before you have to begin repaying your loan.
Flexible repayment terms
Most education loan have flexible repayment terms, which means that you can select how long you want to repay your loan. This can make it more fantastic to repay your loan if you have a low income.
Conclusion
Education loans can be a great way to finance your education. However, it is significant to weigh the benefits and drawbacks carefully before you decide whether or not to take out an education loan. Taking an education loan helps you construct a good credit score, as this is the first loan in an individual’s life. If you repay the loan on time without any evasions, then it also makes it more fantastic for you to get a home loan, car loan, etc., in the future.
