Ben­e­fits of an Ed­u­ca­tion Loan

Consumer Voice - - Education Loans -

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.

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