Save Money with Education Loan #loan #banks #finance #education

➡️Repayment Holiday
🔸 A moratorium period aka Loan Repayment Holiday in education loan is defined as the time where the borrower is not required to repay the loan.

Usually, in personal loans, repayment for a loan starts soon after a borrower takes it, but in the education loan moratorium period, lenders allow students to start their repayment once they finish their course and start earning.

The moratorium period is usually the course duration plus 6 months or 1 year where the lender allows a student to take adequate time to sort out their finances and prepare for loan repayment accordingly.

– Banks generally charge interest for the moratorium period, which is later added to the principal. As the interest on the loan generally accrues over the moratorium period, a lender usually calculates interest on the loan on a simple interest basis. So, students who are willing to start their monthly EMIs (equated monthly installment) can start paying during the moratorium period as this would ultimately help them relieve the interest burden.

➡️Section 80E:
🔸 The interest amount paid during the financial year is allowable as a deduction from taxable* income. There is no limit on the deduction amount. The benefit of the deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier. It is applicable even when you have taken the education loan for your spouse, children or for a student for whom you are the legal guardian.

➡️So if someone tries to convince you to take up somer other kind of loan like, “loan against your property” or “gold loan” to finance you education then please avoid it cause you’ll loose major benefits which is exclusive to education loan.

Source: Bank Bazaar, wemakescholars, clearTax
Also thanks @wemakescholars for making detailed videos on education loans on YT for spreading awareness 🙏
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