You crack the entrance tests and get admitted to your dream college, only to find that burning the midnight oil is not the only price you have to pay. The college fees for the next few years are simply beyond what you or your parents can afford. How do you even begin to get that education loan?
One has to start paying back the amount six months after completing the course, before which only simple interest is charged. Parents can avail tax benefits while paying this interest. The interest charged is between 10.50% and 11.50% for the loan and there is no penalty for foreclosure of the loan.
Education loans can be availed for equipment and hostel fees as well. The maximum limit for domestic loans is Rs 10,00,000 and for international courses Rs20,00,000. The loan has to be paid off in a maximum of 5 to 7 years. Most banks offer similar interest rates but before choosing the bank make sure you’ve estimated correctly the expense of your course and any details the bank has on tenure and commencement of repayment of the loan.