Why Education Loans?
Education loans help students finance higher education expenses including tuition, hostel, books, and travel costs. With rising education costs, these loans have become essential with favorable moratorium periods and tax benefits.
Types of Education Loans
Domestic loans cover studies within India. Overseas loans fund foreign university studies. Loans up to Rs. 4 lakh need no collateral, Rs. 4-7.5 lakh need a co-borrower, above Rs. 7.5 lakh require collateral.
Interest Rates
Rates range from 8% to 15% per annum. Public banks like SBI and Bank of Baroda offer lower rates. Repayment starts 6-12 months after course completion with tenure of 5-15 years.
Government Subsidies
Central Government Interest Subsidy covers full interest during moratorium for families with income below Rs. 4.5 lakh. Vidyalakshmi portal enables applying across multiple banks.
Tax Benefits
Under Section 80E, entire interest paid is tax deductible with no upper limit for up to 8 years from repayment start date.