VMPL
New Delhi [India], March 27: Education plays a pivotal role in shaping the future of individuals and societies alike. Higher education, in particular, opens up many career opportunities and equips students with the skills necessary to excel in the workforce. However, the rising costs of education, both in India and abroad, often create a significant financial barrier for students and their families. Education loans have emerged as a vital financial solution, empowering students to pursue their academic dreams without worrying about financial constraints. In this article, we will explore how education loans are empowering students to access quality education and build successful careers.
Access to Premier Educational Institutions
The education loan makes it possible for students to attend top universities and colleges across the world. Many prestigious universities have high tuition fees that make it challenging for most students to fund their education. However, education loans help mitigate these issues, enabling students to turn their academic goals into reality. Most lenders generally go beyond tuition amounts and include costs for housing, books, and other living expenses. This enables students to concentrate on their studies without any financial worries.
Tax Benefits
Loans made available for educational purposes come with some tax benefits. The Indian Government has made this easier for citizens by allowing tax benefit under Section 80E in the Income Tax Act. Applicant can claim tax deductions on the interest associated with educational loans, which in turn reduces the borrower’s taxable income. This benefit can be issued for a maximum of eight years from the start of the loan repayment period, providing borrowers with financial ease. This is particularly helpful in the initial years of their career, when their income is still growing.
Flexible Repayment Options
Education loans come with flexible repayment options, which include a moratorium period during which students do not have to start repaying the loan immediately after disbursement. The moratorium period typically lasts until the completion of the course and an additional 6-12 months, allowing students time to find a job before they begin repaying the loan. Furthermore, loan repayment terms can be customised to suit the borrower’s financial situation, making it easier for students to manage their finances.
Building a Strong Credit History
The timely repayment of education loans helps students build a solid credit history. A good credit score is an essential factor when applying for other loans, such as personal loans, car loans, or home loans, later in life. By responsibly managing an education loan, students can establish a positive credit record, which will serve them well in their future financial decisions. Additionally, having a good credit score can improve their chances of approval when using a personal loan app.
Preservation of Family Savings
Education loans provide families with the ability to preserve their savings and investments for other critical needs, such as retirement or emergencies. Rather than using savings or selling assets to fund education, families can opt for an education loan. This can help manage the costs of higher education over a more extended period. An education loan ensures that families can continue to focus on long-term financial goals while ensuring their child receives a quality education.
Financial Independence
Taking out an education loan allows students to achieve a certain level of financial independence. Instead of relying entirely on family support, students can take charge of their academic journey and future career. This independence not only eases the financial burden on families but also helps students become more responsible and disciplined in managing their finances.
Comprehensive Coverage
Education loans typically cover all expenses related to education, not just tuition fees. This comprehensive coverage ensures that students are fully supported throughout their academic journey. The loan can be used to cover examination fees, library charges, accommodation costs, travel expenses for studying abroad, and even the purchase of necessary equipment like laptops or books. With these loans, students can focus entirely on their studies without worrying about incidental expenses.
No Collateral Requirement for Smaller Loans
Many financial institutions offer education loans up to a certain limit without requiring collateral. This feature is particularly beneficial for students from middle or lower-income families who may not have assets to pledge as security. Without the need for collateral, students can access the funds they need for their education, making education loans more accessible to a broader range of students.
Conclusion
Education loans have revolutionized access to higher education, enabling countless students to achieve their academic and career goals. By offering flexible repayment terms, tax benefits, and access to premier institutions, education loans empower students to pursue their dreams without straining their pockets. As the cost of education continues to rise, education loans will remain a crucial tool for ensuring that deserving students can access quality education and build a brighter future for themselves. In the long run, education loans not only transform the lives of individuals but also contribute to the overall development and progress of society.
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