📖 Understanding Education Loans

Education loans help students finance higher education in India or abroad. Banks offer loans up to ₹1.5 crore for studies abroad and up to ₹50 lakh for studies in India, depending on the course and institution.

A unique feature of education loans is the moratorium period - you don't have to pay anything during your course plus 6-12 months after completion. However, simple interest accrues during this period. Some banks offer interest subsidy for economically weaker students.

Interest rates range from 6.8% to 12%. Government banks usually offer lower rates. Girls and students from premier institutes may get rate concessions. Education loan interest is tax-deductible under Section 80E for 8 years after repayment starts.

Typically, parents or guardians are co-borrowers. For loans above ₹7.5 lakh, collateral may be required. Start repayment planning early - even small payments during moratorium can significantly reduce your total burden.