The cost of higher education in management has rapidly increased in the past decade. MBA prices are soaring high. While you cannot opt out from making these payments, you do need to choose between 2 things. Should you avail an education loan or should you drain your own bank balance?
The thing to wonder is that why do you even need to concern yourself with the second option? An education loan offers you loads of benefits and you should definitely go for that. People often perceive education loans as needless liabilities. However, they don’t realize how much helpful they are. Some banks even have schemes customized specifically for MBA courses. UCO Bank and Central Bank of India are examples.
UCO Bank Education Loan offers Super Premier scheme specifically for the 8 top IIMs. Central Bank of India Education Loan offers 2 schemes for MBA. Cent Vidyarthi for IIMs and Cent E-MBA loan scheme. These banks customize education loan schemes according to your needs. Availing them will prevent you from exhausting your savings.
Interest accumulation is definitely a big concern which refrains people from availing loans but there is a solution to that problem too.
Why Should You Choose Education Loan?
People often think why should they go for an education loan when it will bind them in EMIs. Few benefits are listed below.
Education Loan helps you in saving your hard-earned money while the bank pays for your child’s education. Your savings are your investments, use them wisely. Do not exhaust your finances.
2. Customized Schemes
Banks offer customized education loans to suit your needs. These often help with respect to your budget and requirements.
3. Use your savings later
The various investments you have made and your precious savings can later be used for other important life events like your child’s marriage, your own retirement, and other financial goals. Keep them invested for them instead of cashing out for the education loan.
4. Attractive Features of Education Loans
In order to attract people, banks keep lower interest rates and offer many other attractive benefits. Flexible repayments, coverage of travel expenses, collateral-free loans and minimum documentation are some of those.
5. Easy Disbursal
Banks these days are quite quick in carrying out the loan procedures. Some banks and NBFCs complete the loan approval process in a mere 5 minutes and disburse the loan in 24 hours only.
6. No Hassle
When you choose an education loan, the bank takes care of all the necessary formalities. You just need to take your installments from time to time. This helps in saving a lot of your time and also assures you of the timely release of installments.
What About the Interest Accumulated?
It is true that these attractive benefits cannot overpower the large interest which accumulates every month. However, as promised, there is a solution to that too. The government of India turns out to be a savior in this case.
Under section 80E of the Income Tax Act, 1961, the interest on education loans is subjected to tax deductions. So the only problem which you had in mind is eliminated. Furthermore, this tax deduction claims can be made up to seven consecutive years following.
To know in detail about the tax deduction process, click here.
So the next time you think about these 2 options, you know what to do. Taking an education loan should always be your decision to provide a hassle-free, proper MBA education to your child.