Benefits of an Education Loan
There are three major reasons why more and more students and families are opting for loans for education: namely rising costs of education, minimising financial burden on parents, and tax benefits. It helps that the loan itself (loan up to Rs 4 lakhs) has the following plus points:
Quick processing Minimum documentation Quantum of finance enlarged to include hostel fees, computer cost, etc. No collateral security insisted upon No third-party surety (in most banks barring one or two) Cheaper rates of interest Longer repayment period No need to pay back loan till completion of course Easy EMIs for regular repayment
You may be surprised to know that education loan has been more or less customised as a loan product by RBI. In fact, it was adopted as a model loan product (for higher education in India and abroad) by Indian Banks’ Association (IBA) in 2015 so that banks would be able to draft their own education loan schemes based on this model. It is available in the IBA website for public viewing.