Should I take out a loan for education abroad?
Education loans are not just a means to cover tuition fees; they come with a multitude of advantages that make them an attractive option for students. From easing financial stress to offering flexible repayment options, the advantages of education loans extend beyond immediate financial relief. By leveraging student loan benefits, you can focus on your studies and achieve your academic goals without constant worries about finances.
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Reduced financial burden - Higher education, whether in India or abroad, will definitely make you reach for your savings. While it sounds better than starting your life with debt, it restricts you financially and dips your savings considerably.
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Tax exemptions on education loans - Tax exemptions are the icing on top of education loans. There are two parts to this - TCS (Tax collected at source) and Tax exemption while filing your Income Tax return.
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Tax benefits under section 80E - Another benefit of an education loan is the tax exemption on the interest paid on an education loan. Under Chapter VI-A of Section 80E of the Income Tax Act of India, the interest payments made for an education loan will fall under ‘Deductions’. These tax benefits on education loans should alone drive students to take one.
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No need to liquidate assets - Typically, parents sell valuable assets to cover the costs of education, which can ultimately disrupt long-term financial plans such as purchasing property or a home for their children’s marriage.
- Build financial discipline - Taking out an education loan can be a valuable opportunity for students to learn financial discipline. It teaches them to budget their expenses and manage their finances responsibly, as they have a loan to repay. Timely repayment of an education loan can positively impact a borrower’s credit history, which can be beneficial for future financial endeavors, such as applying for credit cards, buying a car, or purchasing a home.
If you are considering an education loan, it’s essential to research and compare the loan options available, including interest rates, repayment terms, and eligibility criteria, to make an informed decision. Additionally, consulting with experts can help you navigate the loan application process and choose the right lender for your needs. So, take that crucial step toward your educational dreams, and explore the possibilities with GyanDhan by checking your education loan eligibility. Your brighter future awaits!