Although there is a steady rise in the education sector, in terms of student enrollment, and literacy, it’s only a marginal rise. Indian literacy rate is still remains poor. For past few decades Indian government has been putting its best leg forward to increase literacy level in India. Education loan schemes are one among them.
NEED:
Many students in India are having brilliant brain and skills. But due to financial shortcomings their skills remain behind curtain. To help such students, concept of loan for education in India was brought. Students, to continue their higher studies can avail loans from bank and can repay them after completion of their study, in installments. For students from a underprivileged background education loan has been proven as magic wind.
Education loan is a loan provided to a student for higher studies by banks.A student who is not able to meet the expense of fees and other related dues of his study after 10+2 may get education loan on certain terms and conditions of the bank. Thus student’s financial shortcoming can’t hamper him from his/her higher studies
Almost Every bank in India is providing facility of education loan.There a few basic terms and conditions to avail these loans:
1.Your course should be eligible for loan. Banks provide education loan for graduation course, post graduation course and professional course. The courses approved by UGC/ Government or AICTE are also eligible for education loan.
2. Following are the expenses for which loan is provided.
(1)Fees payable to college/ school/hostel
(2)Examination/library/laboratory fees
(3)Purchase of books, equipment etc.
(4)Purchase of computer if necessary for studies
(5)Caution deposit/ Refundable deposit(maximum 10% of tution fee for entire course)
(6)Cost of two wheeler up to Rs. 50000
(7)Any other expense which bank find necessary for studies.
3. Maximum limit of loan is 10lac for study in India and 20lac for study abroad.However this limit may differ from bank to bank.
4. Interest rate depends upon SBAR.
There are a few things to have in mind when availing loans.Always be alert for interest rates as they keep fluctuate and some time bank may charge more.The most important thing one should have in his mind about repayment of loan is, One should always agree to start repay loan after 6 months from the completion of study.
Tax benefit of education loan:
One can avail tax benefits u/s 80E for interest paid bye him for education loan from the year he starts paying interest and for next 7 immediately succeeding assessment year i.e. one can enjoy tax benefit for 8 years for interest paid on education loan for himself or spouse or children. The tax benefit available is subject to some terms and conditions of Income Tax Act.
Educational loan helps impoverished but talented student to study further. Poor and middle class student can take advantage of studying in reputed institutes as such institutes have higher fees structure. In India, education loan is very crucial to higher its literacy. But there is lack of knowledge about loan in Indian students.
Tags: education, Education Loan, school for india, Schools, schoolsforindia
