Rising Inflation Means Cost of Education is Also on The Rise

Posted by Shyamoli Shah on November 15th, 2016

With the rising inflation, the cost of everything is skyrocketing. Even education is not left behind. Earlier lower middle class people who cannot afford a good education for their children used to take loan. But, now 3 out of 5 people have taken education loan so that their children can pursue course of their choice at a decent college.

Student education loan has become need of the hour for people. Keeping this situation in mind, lots of Banks and financial institutions have come up with unique offers to lure as much students as they. Lots of banks and financial institutions claim to provide hassle free and easy student loans. Taking student education loan is easy but the difficult part is repaying it.

The eligibility criteria vary from bank to bank and financial institution to financial institution but few things are same like, the person taking the loan should have secured admission in the institute. The institute or course of study must be recognized by UGC/AICTE/AIBMS/ICMR, etc. The person needs to be an Indian citizen and should be 17 years old or above. Also, the government Of India is giving tax benefit to the borrower of student education loan. The moment a person start repaying the education loan, he/she can deduct the interest amount from the total income while calculating tax. This means the effective interest rate on the Education Loan Eligibility works out to a lower amount.

Student education loan in India covers:

Expenses related to tuition fee, admission fees, examination fee and other compulsory fees that are related to the course demanded by university or institute. Expenses related to purchase of books, laptop and technological tools. Any other expense related to complete the course- like study tours, project work, thesis, etc.

The various repayment options to make student education loan as easy student loan are:

EMI Repayment while you are still studying, this means the borrower has to start repaying the amount through EMI immediately after first installment of loan amount is disbursed. In this option, the EMI amount changes each time additional disbursements are made.

Loan Repayment after completing the studies, this means EMIs start after the course of study get completed. The borrower doesn't need to pay any interest or principal amount during the time of study. The interest will accrue and will be added to the principal when EMI payment starts.

Step-up EMI, this means the amount of EMI will be directly proportional to the increase in income. The student education loan repayment is divided in three stages. The borrower has the option to choose EMI amount in the first two stages. In the third stage, the amount of EMI will be calculated on the basis of outstanding loan balance.

Payment of interest while studying, this means borrower has to pay the amount of accrued interest as EMI while still studying only. The balance unpaid interest is added to the loan balance that you have to pay after completing the course of study.

Partial payment of interest while studying, this means after the disbursement of first installment of education loan amount, the partial payment of interest will start. The Interest payable component changes each time subsequent disbursements are made based on the total amount disbursed till that date. The balance interest accrued shall be added to the Loan principal when EMI payment starts.

I think with these repayment options, student education loan indeed have become easy student loans.

Source: http://www.sooperarticles.com/finance-articles/loans-articles/rising-inflation-means-cost-education-also-rise-1302196.html