With education prices sky-rocketing every year, funding higher education from your own pocket can leave a gaping hole in your savings. But, considering alternative college options due to a lack of funds should never be an option. Personal loans for students can help you get the education you deserve and fulfill your true potential. Before availing of a loan, it is essential that you know a few important things related to it.
Here are some student loan facts you should know before applying for one.
1. Main applicant
The student pursuing the degree is the main applicant for the loan, and hence, will be responsible for repaying the loan. A co-applicant is mandatory for full-time programs. Parents, spouses, or siblings can be co-applicants for the loan. If the student is incapable of making the loan repayments, the co-applicants will be responsible for repaying the loan.
2. Loans can cover more than just tuition fee
Once you receive the admission letter from your desired college, you can get your loan amount approved. Personal loan not only cover your tuition, but also extra expenses such as hostel fees, cost of books, travel costs, and so on.
Additional Read: What are Some of the Challenges of Taking an Education Loan?
3. You can claim tax benefits on your education loan
According to section 80E of the IT Act, the borrower is eligible to claim tax deduction equal to the interest amount. While the entire interest amount can be deducted from your taxable income, this is only allowed for a maximum of 8 years. Note that the principal amount repaid does not qualify for any kind of tax deduction.
4. Loan eligibility depends on the course and university
Lenders want to ensure that borrowers have good employment prospects after finishing their degree so they can repay the loan. Thus, they will make sure that your course is accredited and your university has a high placement rate. All in all, lenders make sure that the course and university the applicant is studying at have a good reputation.
5. Eligibility criteria
The eligibility criteria for Tata Capital’s education loan are as follows:
- Applicant must be an Indian national
- Applicant must be between the age of 16-26 years
- Should have a good past academic record
- You or your parents should have a stable income
- Should show security or present a guarantor. Your eligibility will also depend on the creditworthiness of your co-applicants
6. Documents required
The documents required for Tata Capital’s education loan are as follows:
- Photo identity proof of student and parent. For eg – Aadhar card, voter ID, passport, etc.
- Attested copies of school mark sheets and certificates
- Admission letter from school/college you intend to study at
- Salary slips from the past three months and ITR documents of the guarantor
- Employment details (if employed)
- Property documents if immovable property is offered as collateral
- Income proof for the past six months
Additional Read: Secured Vs Unsecured Education Loans: A Detailed Guide
To sum it up
Looking for education loans to finance your higher education? Look no further. Tata Capital offers competitive education loan interest ratesstarting at 10.99%.
So what are you waiting for? Click here to check out Tata Capital’s personal loan EMI calculator and formulate a repayment plan best suited to your needs.