Before taking an education loan, know about these 5 things, you will be in profit

Education Loan Tips: Be it going to the preferred college or going abroad for higher education, these two are becoming difficult goals for most of the students due to the rising cost of education. Due to costly education, it has become very difficult to get access to quality education, despite the many efforts made by parents and students.

According to media reports, between 2008- 2014, the cost of general education in private institutions increased by an average of 175 percent and for technical and vocational education by 96%, according to data from the National Sample Survey Office (NSSO), according to media reports. In these circumstances, an education loan can be a solution. Education loan is one of the first major financial decisions of a person’s life. Therefore, it is important to keep some things in mind while taking an education loan. Know about them:-

Getting clarity on the loan process
Before filing the loan application, students should be well versed about the entire process of taking loan from any institution and repaying it.

A student should be aware of several things like course fee, required documents, scholarship, interest on loan and any processing fees associated with the loan.

keep documents ready
The documents that need to be submitted for the loan are different for all the lenders, the documents a student needs to be aware of when applying for an education loan. We are telling you about some documents which are generally needed:-

• KYC documents of students and co-applicants – Aadhar Card, PAN Card, Passport.
• Any additional documents by the co-applicants.
• If the student is a working professional – Address proof, last two Form 16, last 3 months salary slip, salary account bank statement and company ID or offer letter.
• Institute admission letter copy with fee structure.
• Mark sheet or passing certificate of SC, HSC, degree course.

loan tenure
Education loans are generally available for tenors ranging from 8-10 years. EMI gets reduced over the long term, however, it increases the overall repayment cost. If a person can repay the loan early, then he should opt for a shorter tenure. Apart from this, there are also installments on prepayment of education loan with zero penalty.

Tax benefits of education loan
Applying for an education loan will make you eligible for tax deduction under section 80(e) of the Income Tax Act, 1961. Note that such deduction can be easily claimed on the interest paid on education loan.

Know about the job opportunities available after the course
Before finalizing the course of your choice as a student, you should have a proper understanding about your first minimum salary which you expect after getting the degree. While deciding about the salary, always keep in mind that you have to pay the education loan installment as well.