Benefits of a Study Abroad Loan

Explore how study abroad loans can transform your dreams into reality. With attractive interest rates and potential tax advantages, these loans provide a viable route to achieving success and gaining financial independence.

Introduction 

Study abroad loans come with interest rates that are more affordable compared to personal loans, and female students have the opportunity to secure an extra 0.5% reduction when opting for Government banks.

1. Lower Interest Rates 

Unlike personal loans, education loans provide a moratorium period, meaning there is no need for EMI payments until the completion of the course plus an initial 6 months (which can be extended to 12 months). This arrangement allows students to concentrate on their studies without financial pressure.

2. Moratorium Holiday- Pay after Completion 

The education loan for international studies encompasses all necessary expenditures, including but not limited to tuition, travel, accommodation, university fees, sustenance, living expenses, laptops, and educational materials.

3. A Wide Range of Expenses Covered

For economically challenged students, the Indian Government provides schemes for interest subsidy. These include the Central Sector Interest Subsidy, Padho Pardesh Scheme, and Dr. Ambedkar Scheme, all of which eliminate interest charges during the moratorium period.

4. Education Loan Interest  Subsidy 

Under Section 80E of the Income Tax Act, 1961, the interest payment on education loans is eligible for tax deduction. By leveraging this provision, you can lower your taxable income, leading to increased savings for your future endeavors.

 5. Tax Benefit - Section 80E 

For students using education loans, foreign remittances exceeding Rs 7 lakh are subject to a reduced TCS rate of 0.5%. The entirety of the TCS amount can be reclaimed, offering valuable financial assistance.

6. Tax Collection at Source   (TCS)  Relief 

CIBIL, a credit report encapsulating credit history, operates on a scale of 300-900, with 750+ indicating a favorable score. Timely EMI repayments for education loans enhance CIBIL scores, contributing to smoother approval processes for future loans.

7. Build Your CIBIL Score 

Obtain an education loan by utilizing assets such as fixed deposits, insurance, and government bonds as collateral. This approach safeguards your valuable assets while allowing you to retain financial agility, enabling you to concentrate on your future goals.

8. No Need to Liquidate Valuable Assets

Education loans transfer the responsibility of repayment onto students after their studies, alleviating parents of financial stress. This empowerment allows you to independently finance your educational journey.

9. Liberating Parents from Loan Burden

Study abroad loans provide you with the means to unleash your international potential. Offering reduced interest rates, advantageous tax implications, and the freedom to manage your finances, these loans allow you to prioritize your education and embrace a more promising future.

Recap