Education Loans - The Financial Tools for a Bright Future

Posted by Shyamoli Shah on September 6th, 2016

Till a few years back higher education from quality institutions was not affordable to some well deserved students because of the economic constraints. So, there was not any alternative except to enter the job market quite prematurely. All this meant untimely ending of many a budding talents and the consequent forced transformation into the mediocrity. Although some scholarships were available, but these were so few in numbers that only the luckiest few could get them.

But presently the scene has changed quite drastically. The boom and rise in the banking industry has resulted in the release of big amounts of funds for education purpose. Consequently the education borrowings are very easily available from various banking institutes in India and this positive change is encouraging and supporting more and more students to go for higher education despite their money shortcomings. Most of the nationalized banks have now various educational loan plans which the students can benefit from.

Going with the modernist trends in the banking sector, even private sector banks are not lagging behind. This wave of change can be well judged from the amusing circumstances that immediately emerged after the results of CAT JEE or PMT/ IIT JEE were announced. Several representatives of the banks queued up for providing student education loan abroad to the successful candidate on very flexible terms and conditions. This spectacle is certainly supporting the promising students to pursue their dreams of higher education and realize their life-long goals. On the internet one can find a big list of name of the banks along with the details regarding several educational loan plans given by them.

Now one can avail loans up to Rs.10 Lakhs for pursuing education inside India and up to Rs.20 Lakhs for studying abroad at very attractive interest rates. More interestingly, the repayment starts one year after the course is completed or six months after getting employment-- whichever is earlier. These loans are available for a tenure of up to seven years which includes the moratorium period. To make them really feasible economic options, several tax Benefits are available under Section 80E of the IT Act. Apart from this these are hassle free forms of finances available at speedy approvals. The completion in the loan industry ensures that you get all the convenience of services at virtually your doorstep. Further, loans available for many other course-related expenses as well.

One can choose from Bank's approved and selected list of Institutes at special privileges. In most of the cases, education loans disbursed straight away to the educational institutions. To ensure that the borrowings are utilized properly, the funds are released as per the fee schedules of the institutes. For those studying abroad, exclusive Telegraphic Transfer facilities are available.

Education loan portfolio of our banking institutions witnessed a growth rate of about 30-40 per cent in 2007-08. On a more promising note it is all set to see a growth of around 40 per cent in 2008-09. The bankers credit the healthy growth rate in this sector to the ever-increasing demand among the students and the smaller number of non-performing assets in the segment. In fact the banks have devised various loan schemes to facilitate the growth of the education loan part of their total liabilities. In addition to taking steps like tying up with various institutes and giving interest rate discounts, they are also according online prompt sanctions to ensure speedy disbursal of the amount.

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