April 15, 2024

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Funding your Education: Personal Loan vs. Education Loan

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Education has been the pillar of development and success. If you are looking out for a degree that will reflect your career you go should go ahead. Like every other thing, education too has been costly today due to innovation and specialization. It is way more advanced and you get to learn things in the best possible way. However, sometimes it may difficult to get an expensive course from a college of repute. Your dream college is not an ordinary one and you need a good amount of funds to get yourself educated there.

Getting a specialized course helps you to get employment easily and makes your life better. If you are looking out for a professional college of repute, you can look for various loan options that will help you fund your education. There are options like education loans and personal loan. Which one should you choose? Understand the working of both and then make an informed decision.

What is a personal loan?

A personal loan is a quick loan that you can get easily. The market is filled with enough options to choose from. It is easy and quite affordable as compared to other types of loans. It is flexible, which means you can use the approved fund for anything that comes up. The best part of a personal loan is you can use the fund for your education and meet up all your needs. There will be no limitations in terms of usage. It is quite affordable because the rate of interest is low as compared to education loans. The approval time makes it a popular one because you get the approval within few hours. From the time of application to approval, you can count few hours, it is that easy. A personal loan is an unsecured one and you don’t have to give away any collateral with the banks.

What is an education loan?

As the name says, an education loan is meant to meet your education needs. If you are looking out for a professional degree or an abroad study, you will need funds. It is very expensive to take a degree from reputed colleges abroad. Starting from course work, to hostel and food you will need a good deal of money. An education loan will help you meet all the expenses related to your studies. It comes with a high rate of interest and you can take it as an expensive form of debt. However, if you are looking out for an instant fund, this will not be suitable. An education loan will take some days to be processed and then you get the fund. However an education loan enjoys tax benefits, whatever are the fees that you pay, you will enjoy a tax deduction on that amount. Isn’t that a great saving?

Difference

Loan amount: In a personal loan the loan amount that gets sanctioned and approved is based on the credit score. If you have a good credit record, you will get a good amount of funds approved. It will help you cover up all your needs. Whereas in an education loan the amount is sanctioned based on the course fee that it will take to finish off the course.

Repayment: In a personal loan the repayment of debt is done just after your amount has been disbursed. You will have to pay the EMI as soon as you have got your loan amount in your account. However, that is not the same for an education loan. Education loan debt repayment starts when the course is over and the student starts earning. He starts paying the debt EMI from the income he goes forward to. So if you are looking ahead to pay EMI after you are stable and employed, an education loan will be beneficial.

Rate of interest: In terms of the rate of interest applicable on the loan amount, it is higher on the side of the personal loan. Personal loan interest rates are always higher than an education loan. It is less in education loan so that there are more people coming up for education loan that can actually lead to development. Keeping education loans affordable will help many students fund their education.

Tax benefits: In a personal loan unless you create an asset out of it, there is no such thing as tax benefits. It is actually little to no possibility of getting tax benefits on the personal loan you have taken. However, in the case of an education loan, you will enjoy tax benefits on the entire course fee you pay.

Wrapping up

To ease up education and bring development, an education loan is the best way to finance your education. It will help you cover all the expenses and you can easily meet the needs that cross your way. More info to visit: http://gernalstory.com/

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