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Speaking of interest on education loans, you would be glad to know that such finance solutions also come with tax benefits that will help you save a lot of money every year.
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If you’re able to cover the cost of your education on your own, you should count yourself lucky. However, despite being able to self-finance your further studies, it is worth considering an education loan. The following article will give you 5 strong reasons for this. Start to end finance solutions.
That’s right! Education loans have progressed in leaps and bounds. Unlike the yesteryears, one does not need to worry about even a single education-related cost with a student loan. Today’s lenders, especially NBFCs will offer funds for the course fee, any entrance exam costs, the cost of a laptop or other study material and even any deposits that need to be paid at the college. If you are thinking about going overseas to study, student loans will also offer finances to cover the airfare, your living expenses, the cost of your visa, the proof of funds for the same, and most other education-related expenses. This leaves you with little to worry about.
You can invest your money to earn handsome returns. That’s another avenue student loans open for you. Instead of committing your funds to one cause, you can invest in mutual funds or any other investment instruments. Some investments promise decent returns and some will even offset the interest expense of the loan and provide you some profit over and above this cost. You could also put the funds in a fixed deposit and keep the money for an emergency.
Tax benefits. Speaking of interest on education loans, you would be glad to know that such finance solutions also come with tax benefits that will help you save a lot of money every year. This is because, as per provisions made possible by Section 80E of the Indian Income Tax Act, the TOTAL interest amount paid in a year can be claimed as deductions on your taxable income, thereby significantly deflating the total tax payable in a year. We have given importance to the word ‘total’ because, unlike home loans, you are allowed to claim the entire interest amount paid in a year, without any capping.
Moratorium period. Education loans in India come with an amazing benefit known as a moratorium period. This is a time frame wherein you are excused from paying any EMIs. This period usually extends from the time you’ve taken the loan until 6 months after you’ve wrapped up your course or found a job, whichever comes earlier. This is a huge benefit to students and allows them to provide their 100% attention to their studies instead of getting worked up about EMIs.
Boost your credit score. Credit scores are becoming very important in today’s day and age. If we are to follow in the footsteps of most western countries, credit scores will influence everything from job interviews to the cost of insurance. In this regard, successfully paying off an education loan will act as a shot in the arm for your credit rating and help you get easy access to any other loans in the future.
So if you’ve got the means to self-finance your education, well and good! But remember to consider taking an education loan as well, you’ll benefit significantly from the following pointers. Good luck and all the best, study hard! Related Blog:- 5 benefits of An Education Loan.
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