What are the benefits of taking an education loan?

Planning

oi-Sunil

By Sunil Fernandes

Published: Wednesday, April 10, 2013, 8:55 [IST]

Looking at pursuing a career, but, finding it difficult to fund the same. Education loan is a great option to fulfill your career and comes with advantages like tax breaks, ease in payments and doorstep service depending on the bank.

What are the limits?

Different banks offer different amounts while you take an education loan. For example a leading private sector bank offers a loan of up to Rs 15 lakh. Interestingly, it does not offer any collateral beyond Rs 7.5 lakh.

Of course, if one has a collateral like a life insurance certificate or fixed deposit or Kissan Vikas Patra to pledge, they can serve as a collateral for enhancing your limits. Also read what are the documents needed for an education loan

Interestingly, some of the banks also offer a list of educational institutions where you can pick your institutions from. Generally you can repay back the education loan after a period of 7 years, including the period when you are studying and unable to pay.

One of the other benefits of an education loan is that you can get a tax benefit under Section 80E of the Income Tax Act.

Loans are generally disbursed directly to the institution. Certain banks offer you doorstep service wherein they facilitate the forwarding of your documents should you desire to take a loan.

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