With the increasing competition and inflation soaring, availing of an education loan is becoming a necessity for almost every student aspiring to move out for higher studies. In the past, parents usually utilized their lifetime savings to finance their child’s education with the help of liquid assets such as land, gold, and fixed deposits. However, these days parents have accepted the paradigm shift to fund their child’s education by availing of cash loan.
As parents and students are now aware of the advantages of education loans, they opt for a personal or an education loan online through loan apps like Creditbee to create a better and brighter future for their children. You might be aware of a few advantages that come with education loans. However, this article will inform you about the maximum benefits of an education loan that can be availed by students for higher studies.
Lesser interest rates –
To finance education, when an individual avails of a personal loan, the interest rates are higher as compared to the education loans. The interest rate levied on the study loans is comparatively less. Moreover, an additional concession of 0.5% is provided by the government banks to all female students availing of education loans. Before availing of a loan from a loan application, one must compare the interest rates charged by online lenders like smart coin and choose one that suits their affordability the best.
Moratorium holiday –
One of the most crucial advantages of availing of education loans is the benefit of pay later; that is, the moratorium holiday. In personal loans, a borrower needs to start paying the EMI from the next month onwards. However, education loan schemes offer a moratorium period which means that the loan can be paid after the completion of the course of education. The time under which an EMI does not begin, or an individual is not required to pay to the lender, is known as the moratorium period. This period consists of a course duration of more than six months, which can even be extended to 12 months so that the students may concentrate on their studies without being burdened by loan repayment.
Wide range of expenses covered –
Education loans offered by Moneytap and other online loan apps for studies abroad provide the benefit of covering almost every important cost a student needs to complete their education. Education loan includes travel, housing, rent, tuition fees, food, expense, university fee, living expenses, laptop, desktop, or any other apparatus required for the absolute completion of education.
Loan interest subsidy –
Several education loan interest subsidy schemes have been introduced by the government of India to benefit loan applicants belonging to financially backward sections of society. These subsidy schemes include waiving the education loan interest charged during the moratorium period.
No more liquidating valuable assets –
As compared to the past years, parents need not liquidate their valuable support to cover the education finances of the students. By availing of an education loan, banks might retain your liquid assets such as insurance, government bonds, and FDs as a security and lend you a loan against such deposits.
With the advent of technology and several services becoming efficient every day, students should now be aware of all the advantages of education loans and how to avoid finishing their savings. Students can avoid the financial burden on their parents by availing of these education loans and later repaying it with their own sources of income independently.