What is the maximum amount a person can receive through an education loan, and what are effective strategies for managing and repaying it?
Hi, The amount of education loan one can get depends on several factors, including the country you plan to study in, the course you are pursuing, the lender, and your overall financial profile.
Loan Amount for Studies Abroad
For studies abroad, loans can go up to INR 1.5 crores or more with collateral and upto 1 cr without collateral.
How to Manage and Repay the Loan:
- Grace Period: Most education loans offer a moratorium period (typically 6 months to 1 year after completing the course), giving you time to find a job before you start repaying the loan.
- Repayment Tenure: The loan repayment period is usually between 10 to 15 years, which allows for manageable EMIs based on your income after you graduate.
- Income-Based Repayment: Some lenders and financial institutions offer flexible repayment options like income-based repayment plans, where the EMI amount is a percentage of your salary.
- Tax Benefits: Under Section 80E of the Income Tax Act (India), you can claim tax deductions on the interest paid on an education loan for up to 8 years.
- Part-Time Jobs: If you are studying abroad, many countries allow students to work part-time, which can help cover living expenses or even contribute to loan repayment.
Tips for Managing Education Loan Repayment:
- Start Early: If possible, start making small payments (like interest) during the moratorium period to reduce the overall loan burden.
- Budget Smartly: Plan a budget and prioritize loan repayment once you start earning. This helps you avoid defaults and maintain a good credit score.
- Consider Refinancing: If you get a job with a better income, consider refinancing the loan for better terms like a lower interest rate.
To find the best loan options tailored to your needs, use tools like GyanDhan’s Loan Eligibility Checker, which helps you compare offers from multiple lenders and secure the best loan for your education.
