The Reserve Bank of India (RBI), the head of the Indian banking system has laid important guidelines to avail education loans in 2024.
Collateral Requirements
According to this guideline, a student can avail of collateral-free education loans up to INR 4 lakhs. A loan of more than INR 4 lakhs requires them to pledge an asset.
Benefits to Meritorious Students and Prestigious College
Students with an excellent academic background and complimentary work experience can avail of higher loan amounts and interest rate rebates.
A student can avail education loans of up to INR 10 lakhs to study in India and up to INR 20 lakhs to study abroad. However, credit score and family income can result in higher loan amounts.
The Limit of Education Loans
As per RBI guidelines for education loans, there must be a moratorium period of 1 year after course completion. Once over, the student must start repaying the amount.
Moratorium Period
Students can avail tax benefits under Section 80E of the Income Tax Act. This allows for deduction of the total interest paid on the education loan from the taxable income.
Tax Benefits
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