Friends today I will discuss about the importance of a loan which is not just a loan but more than anything which can turn your life into a completely different direction if you understand it wisely.
There is always a starting point of anything in our life when we are doing it first time.
Let it be any new task assigned by teachers in school or by parents,
Out first bicycle ride,any subject that we fear most or making a new friends.
Feelings of hesitation,some ignorance,no liking/no interest,not so worthy or annoying for certain valid reasons we all have these issues at certain point of time in our life.
But all this is completely okay as we human being with different state of mind sets – we think,we understand,we like ,we analyse we decide and this is what we are.
It’s all about our choice to accept anything or reject on the basis on the above criteria.
But one this which make us happy is getting the things we want in life. It satisfies us on every point of life on every stage of our life.
In childhood our liking or needs are different as we grow up and starts understand the surroundings our needs changes and so on in our adulthood we are in a completely different state where we wisely decide that these are our priorities and needs to full.
The chain of these phases of life is linked with each other in a way where we knew that what next is coming in life but we don’t see the complete picture of it.
Which is very important to correctly plan our future.
Many of us always dream for very bright career but we don’t have a good Financial Plan for our career.
Yes, it is true and we should accept it.
Without planning we can’t win a small game so how can we inspire for a bright career without a financial plan?
NEED OF FINANCIAL PLAN FOR A BRIGHT CAREER
Nothing comes free in this world.
Yes everything comes with a price tag sometimes it is tagged with product and sometimes tag is that much huge in size we can’t even see if correctly.
When it comes to our career planning,same situation faced by most of the students.
Most of the parent are ready to pay any cost to see their childrens to study in a well reputed college/ University so that after completion of higher studies their son or daughter can secure a good job in a reputed company or government department.
As I pointed out above the term cost. It meant a lot and needs to understand it very well that how much cost is required to full fill there dreams to see their childrens in a successful profession in coming years.
Being in financial sector at different geographical locations of our country,I have seen so many times where parents are sacrificing precious asset belongs to them just to arrange the funds for childrens higher education.
But it is really not needed to spare the inheritance assets or life time savings to pay for higher education of childrens.
There are other ways around to arrange these funds and without loosing anything from your side.
When you have a dream of a promising career and you have that strong willingness to pursue the career to achieve the dream career for you.
Education loans are very much readily available to support you in the journey of your dream career you don’t need to loose hopes
Yes, you read it right. It’s Education loans we are going to discuss about.
Here we are just trying to highlight the features and important of education loans.
I have heard many times from peoples who are not doing what they wanted to do just because they don’t have sufficient funds to pursue the studies and they could not become successful like others even being good in academics.
Lack of knowledge is the fear faced by many students with regards to have a plan for financing their Higher Studies.
Education loan is a easiest way in India to get the required finance from a Bank and give wings to your dream career.
The process is very easy and all should first know it as you need to be acquaint with all the details to apply for it. These details we will discuss here later.
Let’s start with the various advantages of education loan.
1.Coverage of all the expense for Study: Education loan covers course fee with course expenses like hostel expenses, exam fee, library charges, lab fees, cost of laptop,cost of books, travel expenses etc.
This can really ease the financial burden on of parents.
2. No security – to avail education loan, you don’t need to give any kind of security like other loans.
( Upto the quantum of Rs. 7.50 lakh which is good enough to pursue higher education in India.)
Bank with assign your future income for the repayment of loan in EMIs post complition of study and securing a employment.
3.Low Rate Of Intereste – The rate of interest is low as compared to any other loan.
It varies from 9% to 11.50%
It depends on various other factors like nature of course, quantum of loan and other benefits provided by government under different schemes of subsidies.
Where effective rate of interest may substantially reduce.
4. Accrual or Capitalisation of Interest – Like other loans where borrower will be charged interest immediately after moratorium on compounding basis ( addition of monthly interest with outstanding principal and charging compounding interest on total outstanding of loan.)
In case of education loan the interest will be start to calculate immediately after 1st disbursement of semester/ annual fee but it will not be added with outstanding principal amount till the completion of moratorium and commencement of EMI ( Equated Monthly Installment).
5.Long Moratorium Period – In easy word loan moratorium period is the time given by banks to borrower till the start/ commencement of 1st EMI.
Under education loan the moratorium is longer than any other loans.
Here the duration of course plus 12 months is the normal period provided as Moratorium by banks.
For Example: if you are going to apply for a B.B.A. Bachelor’s in Business Administration course which is a 3 year course in this case you will get total moratorium of 3 years + 1 year = 4 years , suppose if you availed the loan on July 2017 and course commencement is also from the same month, your course period is from July 2017 to July 2020 and 1 year is from August 2020 to July 2021.
In this case your EMIs will be start/ commence from August 2021.
So no need to worry about repayment of loan EMI.
6.Longer Repayment Period – Education loans borrower get longer period of repayment of loan with EMI so that it will not become burden on borrower where he is fresher and started a job with initial or small package of salary.
Under Education loans the loan repayment period is as long as 15 years.
More on this the 15 years repayment period is over and above course duration and moratorium period.
The added advantage of this long repayment period is that you can have a smaller amount of EMI. Which is easy to discharge on monthly basis even if you are earning not good in your initial time of career or initial job placements.
7.First loan of your life– Usually loans are availed by anyone post completion of education in general scenario like Housing loan, Vehicle loan, Business loan, Consumer Durable loan, personal loans.
Education Loan gives you chance to get the first loan sooner in your life and it gives financial comfortable to accomplish your Higher Studies and establish your career.
8.Improve Credibility/Credit Rating (CIBIL Score) – Yes, by availing any loan early in life gives you chance to gradually build your credit score with regular Repayment of loan EMI which give foundation to your individual credit worthiness, Credit Rating like CIBIL-TransUnion, Equifax, and Experian etc.
All these scores are very important to avail any loan in india as it shows the credibility of individual and one of the decisive parameters of any loan sanction with the best Rate of interest. The higher credit rating can help you to get the best rate of interest for any loan in future.
So keep paying you EMI helps you indirectly to build you credit score and education loan comes early in life which is one more added advantage to plan for future loans.
9.Income Tax Benefit – Repayment of interest you pay on an education loan is deductible under section 80E of the Income Tax Act.
Only loans taken for higher education – full time studies in any graduate or post-graduate, professional, and pure and applied science courses – may claim deduction.
The deduction will be available for a maximum of eight years starting from the day you start repaying.
10.Ease to apply:Online Application -Vidya Lakshmi Portal provides single window for Students to access information and make application for Educational Loans provided by Banks and Govt Scholarships.
It has the following features:
- Information about Educational Loan Schemes of Banks
- Common Educational Loan Application Form for Students
- Apply to multiple Banks for Educational Loans
- Facility for Banks to download Students Loan Applications
- Facility for Banks to upload loan processing status
- Facility for Students to email grievances/queries relating to Educational Loans to Banks
- Linkage to National Scholarship Portal for information and application for Govt Scholarships
Vidya Lakshmi portal is a first of its kind portal for students seeking Education Loan. This portal has been developed under the guidance of Department of Financial Services, (Ministry of Finance) , Department of Higher Education (Ministry of Human Resource Development) and Indian Banks Association (IBA).
The portal has been developed and being maintained by NSDL e-Governance Infrastructure Limited.
Students can view, apply and track the education loan applications to banks anytime, anywhere by accessing the portal. The portal also provides linkages to National Scholarship Portal.
HOW TO APPLY ON VIDHYA LAKSHMI PORTAL
Click Here to Apply for an Educational Loan
Frequently Asked Questions (FAQ) for Students: National Scholarship Portal
11.Secure life time Savings – By availing an education loan you will can utilise your savings for other financial purposes like retirement fund, children’s marriage, purchase a house etc.
It will ensure that you can easily continue with other goal of life with out touching your life time savings for child’s education and you will be financially independent on your.
TO BE CONTINUED…..!!!
Government Education Loan Subsidy Schemes For Higher Education In India & Abroad.
Note: ALL THE INFORMATION PROVIDED HERE ARE GENERAL AND NOT SPECIFIC TO ANY BANKS LOAN OFFERING.THESE ARE GENERAL INFORMATION FOR KNOWLEDGE AND UNDERSTANDING OF LOAN FACILITIES PROVIDED BY BANKS.
FOR SPECIFIC LOAN FACILITIES PROVIDED BY BANKS PLEASE REFER TO BANK SPECIFIC LOAN DETAILS ON BANK’S WEBSITE.
Disclaimer: Since the rules, regulations, eligibility conditions, repayments and interests rates etc are revised by the banks from time to time in keeping pace with the changing capital market conditions, students and parents are advised to thoroughly check the terms and conditions of educational loan scheme on offer at the time of application.