Benefits of Getting an Overseas Education Loan over Self-funding
Parents often cringe at the thought
of getting an overseas education loan. Many who cannot afford the expense of
overseas education miss the opportunity due to the misconception about
education loans. However, many who are financially sound prefer to self-finance
the overseas education loans.
This article points out why aspirants
should go for education loans for abroad studies instead of self-funding. The assorted benefits of going for overseas
education loans are given below:
1.
Tax Benefits
A significant advantage
received by borrowers is Income Tax Benefit. Under section 80E of the Income
Tax Act of India, Loan applicants will be eligible for deductions in rate of
interest paid on the loan. It must be ensured that loans are taken only from
gazetted financial institutions to be eligible for this benefit. Any Indian
citizen may claim this benefit on education loans for self, married partner,
children or for someone who is under the person’s legal guardianship.
2.
Hassle free funding
Once the education loan
has been sanctioned, the payments for institution’s fee, living expense, flight
tickets and other costs which the loan amount covers can be obtained in a
hassle-free manner. This is in contrast to self funding where one has to
liquidate assets, withdraw from deposits or wait for a policy’s tenure to end
so as to get the desired amount which is required to pay all these assorted
costs.
3.
100% Funding
Many of the banks and financial
institutions including a nationalized bank such as Bank of Baroda provide
complete funding without any margin money. Since the complete amount is
available for disbursement, the student is assured that all the payments and necessary
costs will be met on time, leading to a lot less worry.
4.
Getting Loans without
Collateral
There are two Kinds of Overseas Education Loans that
the applicant may opt for Secured loans, if collateral is available and
unsecured loans without the requirement of collateral.
People without any
property are thus benefited by the option of unsecured loan and the amount may
later be repaid without even mortgaging an asset.
5.
Concise Proof of Funds for
Visa Authorities
Through the loan sanction
letter provided by the bank, a concise proof of funds is available to
demonstrate financial sufficiency to the visa authorities. Self-funding would
require lots of additional documentation which will have to go through a
stringent evaluation process.
6.
Credit Score Improvement
Your credit score is an extremely
important parameter if you ever wish to get a loan in the future. If you have a
higher credit score, you are more liable to be sanctioned a loan in the future
since banks check your credit score as they take in your loan application. So,
if you take an education loan and manage to repay it within time, your credit
score improves significantly.
These
are some of the reasons why you must opt for an education loan to fund your
overseas study. To get complete Assistance for Overseas Education Loan Process you may get the help of renowned
Overseas education Consultants in your city.
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