.jpg?width=1200)
If finances are the barrier between you and the career you aspire to, a student loan offers a solution to let you afford your education without worrying about funds.
Investing in higher education is essential for personal growth and career advancement but it comes with significant costs. A student loan in India provides the means to support your academic journey and secure your financial future, making it a valuable tool in achieving your educational and professional goals.
A student loan is tailored to fit individual requirements, and the application process is straightforward. It covers your tuition fees, accommodation, and other expenses as well.
Explore the advantages of a student loan below:
● Financial Assistance
One of the primary advantages of student loans is their ability to provide financial access to education. Tuition fees, books, materials, and living expenses can soon increase. For many students and their families, covering these expenses upfront might be challenging. Student loans fill this gap by funding students to pay for their educational expenses as every student has to bear tuition and living expenses.
Student loans support the tuition expenses imposed by educational institutions, which can vary greatly based on the program and school. Loans can also cover living expenses such as rent, food, transportation, and other necessities, allowing students to focus on their studies without financial constraints.
● Tax benefits
To incentivise borrowers to take out an education loan, there's a tax advantage for repaying it. When you take an education loan, the interest you pay (included in your EMI) can be claimed as a deduction under Section 80E of the Income Tax Act, 1961. To qualify for this deduction, you need a certificate from the lender detailing the interest and principal portions of your repayments.
The tax benefit can be claimed by either the parent or the student, depending on who makes the repayments for the education loan. Tax benefits are allowed only under tax regime and up to 8 years only. To qualify for tax benefits, the education loan must be taken for higher education purposes for yourself, your spouse, dependent children, or a student for whom you are the legal guardian.
● Improves credit score
The most significant factor in determining your credit score is your payment history. Making consistent, on-time payments on your student loan demonstrates dependability in debt management, which improves your credit. Making regular, on-time payments shows lenders that you can manage credit responsibly, which is an important element in evaluating your credit score.
During the repayment period, maintaining a positive payment history over the loan's duration can contribute to a stable and positive long-term credit profile. Successfully repaying a student loan over time demonstrates responsible financial behaviour and can enhance your creditworthiness. Lenders view a history of paid-off loans favourably when assessing your creditworthiness for future loans or credit lines.
● Lower interest rates
Student loans are used for educational purposes, which are seen as investments in future earnings. Lenders perceive education as a lower-risk endeavour compared to other types of borrowing, such as personal loans or credit cards used for discretionary spending.
Student loans might often come with longer repayment terms compared to other types of loans. This extended period reduces the monthly payment amount, making the loan more affordable for borrowers. Lower monthly payments may attract more borrowers, enabling lenders to offer competitive interest rates while still ensuring profitability.
Apply for a student loan today!
Banks offer many ways through which you can apply for a student loan in India:
Offline
● Visit the nearest bank branch
● Request a student loan application form
● Carefully fill out the application
● The loan process will begin after the submission
Online
● Visit the bank’s website
● Go to the loans section, then education loan
● Click on Apply now
● Enter the required details
● Submit the required documents
● The executives will contact you shortly for further verification.
Pre-Approved loans
You may be eligible for a pre-approved loan if you are already an existing user of the bank. Leading institutions like ICICI Bank also provide this option and make it easier to secure a student loan. This step has a minimal documentation process and is more convenient than other options.
Conclusion
Student loans offer numerous advantages, from providing financial aid and tax benefits to improving credit scores and offering lower interest rates compared to other loan types. Furthermore, as college students return their loans, they begin to build their credit history. Establishing a strong credit score history through timely mortgage repayments indicates financial responsibility and enhances creditworthiness.
By applying these benefits, students can focus on their academic pursuits without the constant worry of financing their education. With a straightforward application process and flexible repayment options, student loans have become an essential tool for achieving educational and career goals.
Disclaimer: This is a syndicated feed. The article is not edited by the FPJ editorial team.
