The Loans Which Invest in the Future

By: addi vardhaman

These loans can be availed either to study in India or abroad. Such borrowings can be availed for all graduate and post-graduate courses in arts, humanities, science and rest of the professional courses like law, engineering and medicine. Presently the education loan providers have started financing the highly technical courses like aviation, biotechnology and fashion. Because the earning capacity of the students after going through these specialized courses is normally very high.

Presently the loans for education have become the favorite lending category in the Indian loan market. Banks consider it as a very healthy sort of investment, because the students are going to be at their mental and physical bests in the coming decade. So the student education loans are now being considered as safe bets by the banks.

In order to increase their client base banks are now going for special packages. Many lending institutions have special education loan packages for the brilliant and needy students. Some of them have arrangements with educational institutions to arrange trouble-free packages for those in need of funds to pursue their studies. Following the same plan, SBI has made arrangements with the IITs and IIMs, while HSBC is in financial league with the Indian School of Business. For the students of IITs, IIMs and other professional streams, Allahabad bank offers cheap rate loans at 200 basis points lesser than the prime lending rate.

The SBI has on offer a very encouraging education loan scheme for those desirous of studying abroad. In league with Thomas Cook it facilitates wire transfers, drafts for foreign currencies, travelers cheques, insurance etc.

SC and ST students are offered even more lucrative education loan schemes. These are very easy in terms of eligibility margin money. They just need to pass a class-not like first class degree requirements like in the case of other categories-to get a loan. Sometimes even the margin money is zero. But these facilities are available only with nationalized banks.

Numerous tax benefits on education loans ensure that ones overall costs of the borrowing are lesser than most of the other loans in the market. One can claim a tax reduction under Income Tax Act, Section 80E for the interest payments on these loans.

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