4 reasons why students are opting for education loan for abroad
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September 20, 2018
Studying abroad is a dream come true for most students. There is nothing like having the I-20 and preparing to fly overseas if you’re going to study in USA. With a sound education if you study abroad in USA or in any other country, you are opening up a world of opportunities for yourself. When you study in USA for instance, you grow as a global citizen. Your outlook widens and your thinking expands exponentially, transcending boundaries.
With the rising cost of education, however, you don’t want your dream to remain just that – a dream. If you study abroad in USA, it is likely to cost upwards of Rs. 30.0 lacs today. These costs are only going to escalate, and parents would not want their children to give up on their dreams owing to this. For them, there would always be the ongoing debate of whether to dip into their savings to finance the education, or to avail of a loan.
Keeping it real
When you’re calculating the cost of education, it’s not just the tuition fees that you have to consider. You would also need to factor in your travel cost, cost of purchasing related study equipment such as a laptop, as well as living expenses. When you sum this up, the number can be rather intimidating for most. Here’s where an education loan for abroad studies comes in, to help you finance your dreams.
Funding education abroad
There is no doubt that education loans to study in USA are easily available today as compared to earlier. With a number of banks and other financial institutions offering to fund your education, you need to look for the right lender to ensure that your dream of study in USA is fulfilled.
When you’re looking at the right education loan for your study in USA, keep in mind that you’re entering into a long-term relationship with your lender. This makes it important for you to choose your lender wisely. When it comes to an education loan, remember that one size does not fit all, and your education loan provider should be able to assist you with finding the solution that is just right for you. Understand in depth the process so that you are able to prepare well in advance and can spare yourself the stress of last-minute running around.
Why avail of an education loan
What makes an education loan the best means to fund your study in USA? When you avail of one, not only are you giving yourself the opportunity to study further, but you are also ensuring that you can reap rich rewards in the long run.
Let’s take a look at some of the major reasons that are prompting students to take an education loan for abroad:
- Protects your savings and assets
- Builds credit history
- Provides tax benefits
- Promotes financial responsibility
Now that you’ve established that studying abroad can be expensive, the question you should ask yourself is, will you be able to finance the entire education comfortably? Very often, the answer is ‘no’, because you would likely need to dip into your own, or your parents’ savings to study abroad in USA or even elsewhere. Traditionally, the most common method to finance study in USA or any other country abroad, would be via selling off an asset, be it land, property or jewellery. With an education loan there is no need to touch your investment portfolio or rejig your parents’ retirement plans.
Availing an education loan is a great opportunity to start building your credit score right from an early age. Repayment for an education loan for abroad begins upon course completion and in most cases, when you would have started working at your first job. Since this is usually the first loan you would have taken, paying it off in a timely manner is a great way to build a good credit score, which in turn has a positive impact on your financial life.
Whether you avail of an education loan for MS in USA or an education loan for abroad to any other country, you can avail of tax benefits in India. Under Section 80E of the Income Tax Act, you can claim an unlimited tax deduction on the interest paid (that is part of the EMI) during the financial year. This is applicable for a period of eight years, or until the interest is paid, whichever is earlier. In the long run, this brings down the cost of your loan and as a result, your overall education.
When you avail of an education loan to study in USA, you have a dual financial responsibility. One is that of managing your day to day expenses while you study abroad in USA, and the second is upon completion of study, when you begin to repay your education loan EMIs. Nothing teaches you the value of money like repaying an education loan for abroad. One of the best financial habits you can acquire is the ability to spend wisely and at the same time, start saving early so that you can plan your financial future.The bottom line
While high tuition fees and cost of living may be a reality, with an education loan for MS in USA these factors should not be the reason to give up on your dreams of pursuing higher education overseas. Further, while you indeed may have the funds to study in USA without needing to avail of an education loan for MS in USA, not dipping into your savings should be your aim. In fact, while most affluent families do have the means to fund study in USA, they are more intent on preserving family assets. Hence, it makes prudent sense to avail of an education loan to study in USA.
With an education loan to study abroad in USA available with ease today as compared to earlier, don’t compromise on quality education. Make an informed decision and prepare to give wings to your dreams.