Education has become one of the biggest investments one can make for their future. However, with increasing tuition charges and living expenses, the question arises: is a study loan worth it? Although education is a powerful tool that can change lives and open doors to new opportunities, there are certain challenges, especially when it comes to pursuing higher studies in prestigious educational establishments. This is where study loans come into the picture, offering a lifeline to those who dream to achieve their academic goals without breaking their family’s bank.
Still considering whether student loans are the right fit for you? Don’t worry. The blog is a comprehensive guide on the benefits of education loans. Therefore, without further delay, let’s dig in!
Taking a student loan can be a game-changer, letting you access quality education without emptying your pockets. Listed below are the amazing benefits of education loans:
Education loans usually have low interest rates in contrast to personal loans or credit cards. The rates are set to make higher studies more accessible to everyone. Low interest rates mean you spend less on interest over the loan term, making abroad studies affordable. Banks, NBFCs, and government schemes offer reasonable rates, ensuring that you can easily manage repayment after course completion. As a result, repayment terms become student-friendly, making it easy to clear debt over time.
Many study loans come with a grace period, also called the repayment holiday. This is one of the best education loan benefits that lets you defer repayment until you complete the course, with some loans offering an extra moratorium holiday before the repayment term starts. You do not need to repay the loan during your course. You can pay back the loan after getting a job. If you want, you can pay the EMI, but no one can force you to do so during your studies. It’s your choice. Since you do not have to worry about repaying the loan during course duration, you get time to complete your studies, land a job, and repay accordingly.
Students who opt for study loans enjoy tax benefits. Under Section 80E of the 1962 Income Tax Act, you can claim a tax deduction on the interest paid. This means that when you pay back your loan to the lender, you can enjoy decreased tax liability, providing additional financial relief. You can claim this benefit for up to 8 years from your repayment time, offering a substantial decrease in your substantial income, thereby minimising the overall loan cost.
One of the biggest education loan benefits is the comprehensive coverage of the whole education cost. Unlike traditional loans, study loans cover more than just tuition fees. They provide extensive financial support, including the following expenses:
This all-inclusive financial solution ensures that you can dedicatedly concentrate on your academics instead of worrying about expenses.
Education loan benefits include helping you and your family preserve savings and other investments for future needs. Your parents work hard to save money for your studies and for emergencies. However, the education cost is skyrocketing, which forces them to liquidate savings. Rather than diving into savings or selling assets to fund your academic dreams, you can use a study loan to manage education costs for an extended tenure. By opting for a study loan, you can help yourself and your parents save for their and your future.
Repaying the education loan on time after the grace period can substantially improve your credit score, which is vital for financial endeavors in the future. Good CIBIL scores open doors to better rates of interest and terms on loans for cars, two-wheelers, residential properties, and even personal loans. Beginning your financial journey with good repayment habits builds a positive tone for your financial future.
One of the most important benefits of education loans is that they open doors to premier global universities. Several eminent educational establishments have high tuition fees that can be challenging to handle without financial help. With a student loan, you can secure admission to your dream university without worrying much about finances, letting you access the best education opportunities.
Many governments offer interest subsidies on study loans, especially for students from economically weaker sections of society. These subsidies decrease the financial burden, ensuring that more students get access to quality education without breaking the bank. If you are eligible for such subsidies, the government can cover some portion of the interest amount, easing repayment.
If you plan to pursue higher studies overseas, student loans cover costs related to tax collected at source on foreign remittance. The compulsory TCS of 5% on sending money abroad can be an important cost. Education loan benefits include financing the 5% TCS, ensuring seamless financial management for studying abroad.
Choosing a study loan to pursue higher education is a wise decision. However, repaying the loan needs effective planning. You need to chalk out an efficient repayment strategy by keeping some money aside for emergencies and spending wisely to ensure EMI payment on time. This fosters good financial habits and motivates you to embrace a financially disciplined approach quite early in life.
Financial challenges can be a barrier in your educational journey. Why should you compromise on your dream college or course when you have the option of education loans? An education loan benefits you by helping you achieve your ultimate goal. You can apply for a student loan and secure that coveted college spot you always dreamed of. Your decision to apply for a student loan will greatly impact your professional career. A renowned institute with high-demand courses will give you the perfect start.
An education loan benefits you by funding your education on your own, independently. By applying for an education loan, several students pride themselves on gaining their own badges. Visualise financing your higher studies independently on your own without any dependence on anybody. This way, you do not need to borrow money from anyone in the family or friends and relatives. You can pay the EMI after you get a job or opt to pay the simple or partial interest during your course program.
Study loans have become an important financial resource for pursuing higher studies. Knowing and understanding education loan benefits is crucial for making sound decisions about financing your education. Student loans offer numerous advantages that can substantially affect your academic and financial future. So, when assessing the question ‘is education loan worth it?’ It needs thorough consideration of its merits and drawbacks. The benefits of education loan such as low interest rates, grace periods, and tax deductions, highlight the potential value of student loans. Also, you need to evaluate your repayment ability, career prospects, and financial effect. By leveraging on these factors carefully, you can make a sound decision that tailors to your academic aspirations and financial future.
