Reasons to choose education loan over personal loan for abroad studies

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Reasons to choose Education Loan over Personal
Loan for Abroad Studies
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• Interest Rate
• Loan amount approval
• Moratorium Period
• Loan Repayment tenure
• EMI value
• Tax Benefits

3
Interest Rate

• The interest rate for personal loans is higher
  comparatively. While for educational loan, during
  the moratorium period, simple interest is
  applicable, post the moratorium, compound
  interest is applicable, which is anyway lesser
  than the personal loan. You can see the
  difference instantly if you try online loan
  application for abroad studies.

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Loan amount approval

• The amount approved for personal loan may not be
  as equal to the requirement at times, while the
  amount approved for the education loan has a well
  accounted figures for the fees to be paid, hence
  the amount that could be approved is guaranteed.

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Moratorium Period

• The period of education, i.e. from the time the
  loan amount is transferred to the account of the
  student till the time the student completes one
  year of his education or completes 6 months after
  getting a job, is called as the moratorium
  period. When this moratorium period ends the
  student has to begin with regular amount of EMI.

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Loan Repayment tenure

• The repayment tenure for different Kinds Of
  Overseas Education Loan is one of the key points.
  For personal loan, the tenure is generally upto 5
  years. Whereas, for education loan, the tenure
  can be upto 15 years if provided by the
  nationalized banks, which decreases the amount of
  EMI comparatively.

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EMI value

• The EMI Easy Monthly Instalments to be paid for
  personal loans begin immediately in the first
  place. While for educational loan, the repayment
  tenure is more so the EMI value is less as well
  as, due to the moratorium period, in the initial
  phase the student has to pay only the simple
  interest which is added to the principal loan
  amount.

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Tax Benefits

• While repaying the loan, the borrower cannot
  claim benefits in case he is paying a personal
  loan. But under the educational loan, the student
  gets the benefit of tax deduction, which can be
  very useful.

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57842
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