What You Need To Know About Taking & Repaying Education Loan in India

As compared to the scenario of education loan a few years ago, now it is more affordable and easier to get an education loan in India. Do you know why? The central government pushes to the popularity of education loans and thus more and more organizations have entered in the space of lending such loans.

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Yes, you can say that the availability of education loan in India for studying abroad has been improved. But the borrowers still should take reasonable steps to avoid committing any tort before applying for a study loan. Nowadays there are various private institutions in India and overseas, having study loan desks of banks on their premises. But do not opt for any random institute simply because it has easy availability of getting loan. You should take the decision based on what course you want to pursue and how that can help you in future.

What’s Next?

Once you have decided your course for higher studies in abroad, check how much loan amount you need. While checking this, remember, together with course fees, you need to consider additional expenses such as accommodation charges and other incidental expenditures etc. After calculating the total cost, deduct the amount your parents are assisting with. The amount you are left with will be the loan amount that you need to apply for.


The next step is to look for the best deal in interest rates on the loan. And when it comes to low interest rate on education loan, Buddy4Study can offer you the loan interest rate as low as 8%. Make sure that the course you have decided to pursue can help you in future to pay back the loan. When you are depending on an education loan to do higher studies, opt for only the courses that have good job prospects. Check the course’s placement detail records and the salary offered to get an idea about its job prospect.

Additional Things Associated with Education Loan :-  When your loan amount is quite high, you will be asked by the bank for a guarantor, which usually is the guardian. You can lower down the overall cost of the loan by leveraging the value of your guarantor or proffering something as collateral.

The tenure of the education loans varies from one bank or organization to other. So is there any definite and ideal tenure? The answer is a big resounding no. One thing is common for every bank and that is the EMI is less for long duration loans but the total interest payout for such loans is much higher. However, interest paid on study loan is tax deductible according to Section 80E of the Income Tax Act, 1961. You can claim only the interest amount of your loan as a tax benefit.

Another convenient option that banks offer on education loan is the moratorium period. During this period, you can choose the option of not paying the EMI for up to a year after the completion of your course or around six months after you begin working, whatever is earlier. But you should remember that moratorium period is not something that you misuse the advantage of. It is not at all an interest-free period. The interest rate grows for the period you don’t pay the installments. Thus I’ll suggest that you should pay back the EMI as soon as possible after you become capable of repaying to minimize the burden of interest.

Hope you have understood now the nitty-gritty of taking and repaying of education loan in India for studying abroad. Education is your basic right. You cannot just let something to stop you pursue your dream of getting higher education and shape a shining career for yourself. Choose education loan instead of creating a hole in your pocket for getting an education from a prestigious institute. Have complete financial support and stay worry-free.

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