The cost of securing a good quality education is going up with every passing year. Whether you choose to go abroad to pursue a higher degree or attain one in India, it is becoming increasingly difficult for parents to fund their children’s education. Despite saving for years together, parents find it tough to spend money on the ever-rising fees for medical, engineering, chartered accountancy, journalism, law and several such coveted professions. As a result, most parents take out education loans on behalf of their children. However, there are many benefits of taking out a loan to fund your higher education. Let’s take look at them.
The loan is applicable for all kinds of courses: It is possible to take out a loan to pursue all kinds of courses and degrees. Whether you need a loan to complete your graduation degree, your post-graduation, a vocational course or even a diploma, you can opt for a student loan. Furthermore, it does not matter where you wish to study –in an Indian university or a foreign university abroad; banks offer the loan as long as you can provide proof of admission and can demonstrate a good academic record.
Anyone can take a loan: Every student aspiring to pursue higher education has the right to apply for this loan. In fact, the Indian Government has made special provisions to this effect. According to a mandate by the Government, students belonging to the economically backward sections of society can apply for education loan from government-controlled banks under a subsidy sponsored by the government, through which low or subsidised rates of interest are offered on the loan. The ‘Central Scheme for Interest Subsidy’ is one such scheme launched by the government.
The loan is available easily: Since loans for higher education have the backing of the Ministry of Human Resource Development (formerly known as the Education ministry) there is an increased availability of this loan. According to RBI guidelines, this loan is considered a priority product across all banks in the country, so as to afford an equal chance at education to everyone.
You can choose a loan amount depending upon your course: Every bank in India offers various student loan amounts. You can get a student education loan of ₹2 lakhs as well as ₹10 lakhs, should you wish to pursue your higher education in India. Students hoping to go abroad for their studies may get a high amount loan of up to ₹20 lakhs. Furthermore, you need to provide collateral only if your loan amount exceeds a certain amount, as per the lending institution’s guidelines.
It covers a wide range of expenses: Your education loan not only covers your tuition fees but also factors in all the expenses related to your course, be it the cost of equipment (for engineering students, for instance), student-union fees, fees for extra-curricular activities, notebooks and textbooks, library charges etc. It also covers your boarding and lodging expenses, dormitory expenses, travel and other associated expenses, during the term of the loan.