Education is undoubtedly the key to developing new skills and gaining knowledge. The number of people who are obtaining higher education has grown exponentially. Most people today focus on achieving higher education to improve their employability. It is a good development but has also increased competition in the job industry. Those with primary education are left with little scope for employment, and the remuneration is also on the lower end. However, it can be costly, and most people cannot afford it. The good thing about the modern economy is that people have easy access to financial products like a personal loan for education.
Key Advantages of Personal Education Loan
Getting a higher education and a professional degree from a reputed institute plays a crucial role in getting the right job. One can easily finance their education by taking a personal loan for education. One of the best things about getting an education loan is that it can be repaid through EMIs after completing the education. Here are some key advantages of getting a personal education loan.
Don’t Have to Rely on Personal Savings
One of the primary benefits of getting a personal education loan is that people don’t have to rely on their personal savings. Most people don’t have a significant amount saved to finance their higher education. The idea of using all the money saved on getting educated might not sit well with some people. In this case, an education loan can help keep your savings intact. It can supplement any financial deficit that comes in your way of getting a college degree. Education loans usually cover 100% of your education-related expenses.
Customized Loan Products
Most lenders who offer educational loans provide customized loan products that are best suitable to individual requirements. Different educational institutes have varied fee structures and facilities. This requires a customized product personal loan for education that can cover all associated expenses. These loan products will take care of all your education-related expenses.
Repayment After Education is Complete
One of the best advantages of an educational loan is that it can be repaid after you have completed your studies. Therefore, you don’t have to worry about paying EMIs during your study tenure. The interest and repayment period only starts after the borrower has completed their education.
Improves Credit Score
One of the most underrated benefits of getting a personal education loan is that it helps to build your credit history. For most students, an education loan is their first significant borrowing. They don’t have a prior credit history, and this loan helps to build the same. In addition, repaying the loan timely can help them maintain a good credit score.
The tax exemption benefit of education loans makes it a lucrative option to finance your education. This is because the interest payments made on account of education loan falls under the “deductions’ category of the Indian Income Tax Act. Therefore, you can deduct the interest payment made to financial institutions to calculate your taxable income.
Inculcates a Sense of Responsibility
Taking an education loan and repaying it timely is a big financial commitment. It teaches a sense of responsibility in the borrower. This helps to build fiscal prudence and introduces the concept of budgeting to students.
Lower Interest Rates
Another key advantage of getting a personal loan for education is the interest rate charged on this loan product. Education loans are cheaper than other loan products because the interest rate is significantly lower. This reduces the total outstanding amount that you have to pay.
It Covers a Wide Range of Expenses
Education loans cover a wide range of expenses related to education. For example, education loans for financing abroad studies also cover travel expenses, study materials, laptops, living, etc.
Option for Collateral-free Loans
The personal education loan offered by most lending parties is collateral-free. Therefore, the borrower doesn’t have to pledge any asset as security against the loan. This is also contingent on the borrower’s profile and required loan amount. You can conduct a personal loan eligibility check to know the exact status.
Long Moratorium Period
The tenure of most education loans is quite lengthy, almost as long as the duration of your course. In some cases, financial institutions also allow borrowers an extended period of 6 months before EMI(s) are started.
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