Education loans are availed to the public to fund the education needs of their own or for the education of their children. Different banks offer education loans at different interest rates.
Education Loan in India
Education loan was introduced in India in 2004. Later on the applicants of this loan increased year on year. Government has even waived interest rates of loans in certain years to reduce the burden on students.
People often opt to avail education loan for the purpose of educating their wards even though they have with them the funds for the following reasons:
- If parents opt for education loan, the students going for college feel the urgency to study harder and be job ready at the earliest.
- The interest paid while repaying the education loan which one has availed from any financial institution is exempt from income tax under section 80E of Income Tax Act.
- The Central has also launched a scheme to provide subsidy for students belonging to the economically weaker sections during the moratorium period which is the course duration plus six or twelve months as the case may be. This is only for students whose family income is Rs. 4.5 lakhs per annum.
Education loans can be availed for pursuing various approved courses both in India and abroad. The list of approved courses varies from Bank to Bank. Some banks even provide education loans for pursuing courses like nursing, teaching, etc.
