Education loan rates are affordable in the country. Therefore, it should be taken advantage of for higher education.
Higher education is getting increasingly expensive. With the opening of new options for education in the education sector, whether in the country or abroad, the cost of obtaining education is also increasing. In such a situation, parents are investing their accumulated capital expenditure in the education of their children. But it is better to take an education loan than to spend all your deposits on the education of the children. It has many advantages.
Benefits of cheap education loan
Education loan rates are cheap in the country. Therefore, it should be taken advantage of for higher education. The advantage of cheap education loan is that instead of repaying it, parents will invest their money in instruments which are getting higher returns so that they can meet their financial goals. Experts say that there should be a balance between self financing and bank financing for higher education
double tax benefit
Under Central Sector Subsidy, the loan applicant gets the benefit of tax deduction under section 80E. The applicant or co-applicant for the loan gets this exemption for eight years. TCS (Tax Collection at source) decreases on teaching children abroad. If there is a foreign exchange transaction of more than seven lakh rupees in a financial year for the purpose of education, then TCS will be 5 percent even without education loan. Even if the student is taking a loan for studies abroad, then the TCS will be 0.5 percent. However, the loan should be more than Rs 7 lakh in a financial year.
Income Tax Return Filling: Do not make these mistakes while filing ITR, otherwise it may cost heavily
Advantages of Moratorium
Students taking education loan get the benefit of moratorium period. That is, he does not have to repay the loan in the moratorium period. The bank charges simple interest during the studies. This amount is later adjusted in EMI. This reduces the EMI at the time of repayment of the loan later. This process reduces the burden of the borrower as he does not have to repay the loan during his studies. Whereas personal loan does not have a moratorium period. It has to be repaid from the time you take the loan.
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