Smart Tax Benefits with Education Loans in India
When you want to pursue higher education at a prestigious college in some other country, you have only one option, and that is taking an education loan. Not only for abroad, we can take education loans for domestic as well. Getting an education loan is equivalent to having financial support.
In this blog, we will try to understand some of the key tax benefits of education loans, the basic nature of these loans, other benefits, and much more. Once you read the complete write-up, you will also get some effective tips to maximize the benefits. Consulting with a loan agency might help you learn about available loan options and choose the best ones.
What Makes Education Loans Different from Other Loans?
Education loans are designed to be different from other loans in India. Students need this loan to continue their studies without any interruption. These loans are flexible enough for kids to have them and boost their careers. Here are some significant differences from the regular loans-
- The first difference you will notice is that the interest rate is low for most education loans in India. That’s why people find them practical for education.
- Compared with other loans, you can have a longer time to repay your loan amount. We have seen students running their loans for fifteen or more years.
- Unless you complete your course, the bank will not start charging any interest on your amount.
- Unlike many long-term loans, you don’t have to attach any collateral with the application here. Having proper documents will do the job.
- Finally, a massive tax benefit is available for education loans only. We will talk about that in detail in the later part of this blog.
Learn about the Key Tax Benefits of Education Loans in India
Now that we have talked about the basics of education loans, it is time to focus on the tax benefits of education loans. After consulting with professionals, we have prepared this item-
- Interest Deduction
As per the law, any borrower who is pursuing their education can have tax benefits under 80E. The interest the student has to pay is totally tax deductible. These tax benefits are available for 8 years. Some conditions are surely there. The loan must be approved by a prominent financial institution in this country, and the person getting the loan should use the money only for educational purposes.
- Use of 80C
When one of the parents is also a co-borrower, he can claim a tax rebate under 80C. This particular claim is not for the students or any primary borrowers. It is better to communicate with dsa agent to find the best loan available in the country and get the maximum benefits.
Some Other Benefits You Can Have for Choosing the Right Education Loan
After knowing the basics, it is time to learn a few benefits you can have from education loans-
- Getting an education loan during student life can help you create a credit history at an early age. It will help you boost your CIBIL score and further help you in the future get the best loans.
- Use the loan money in different ways. Tuition, hostel, exams, and other fees are all part of the total expenses.
- The approval rate is higher for education loans than other loans in this country.
- When you get admission to an esteemed institute, banks can offer you better terms and easy loans.
Apply for an education loan, and you will surely learn about more benefits you can have from these loans.
Here are Some Smart Tips That Will Help You Maximize Those Benefits
- A number of lending companies are available in this country. Checking various aspects of these loans will help you find the best ones in the market.
- Choosing a more extended moratorium is excellent for relaxing your financial pressure.
- There are states where the government offers added subsidies.
- Claim all the tax benefits available in this country.
- Don’t have a loan that you can’t handle in the future.
We hope you will learn many important aspects from this blog and use that knowledge to find the best education loan to fulfill your demands.