The idea of a loan can feel like an unnecessary financial burden. You may be wondering if it makes sense to get one if your family has the ability and willingness to pay for your education up front. Well, the Too Long; Didn’t Read is, yes! For the most part, taking a loan for studying abroad is a more prudent choice than self-financing. Let’s take a look at why.
It is actually less of an upfront financial burden
Think about it. If you’re self-financing, you’ll need to pay all required fees, tuition, living expenses and study material costs upfront. These can mount up quickly and become quite exorbitant. On the other hand, your education loan will take care of everything for you! What’s more, you can avail of the loan in instalments, for instance as determined by your university’s fee payment schedule. Sounds far more manageable, doesn’t it?
You can help keep your family’s savings intact
It’s great to have family that is financially able to take care of all your needs, but it’s likely they will be dipping into their savings or liquidating assets to do so. With an education loan, you can take charge of your own finances and help preserve your family’s savings and the value of their assets. You can rest easy knowing they won’t fall short if they need those savings in an emergency, or just want to plan ahead for the family’s future. Won’t that feel good?
It gives you a financial planning head start
Taking a loan, and being responsible for paying it, gives you the opportunity to learn more about what it takes to manage your finances. This will provide an invaluable foundation as you move ahead in your career and in life. A loan also helps you start building a credit history early, which will make getting loans for your future dreams easier. Take a look at our Budgeting 101 blog for more tips on becoming a financial planning pro.
It can help you save more!
We can see you going ‘Wait what, how?’… with tax savings, that’s how! Education loans like an Credila Education Loan are eligible for tax exemptions for the interest amount paid under Section 80E of the Income Tax Act, 1961.
It makes it easy for you to give proof of funds
Most countries and universities require students to prove they’re capable of paying for their education and living expenses before they will approve a visa and confirm admission. If you’re self-financing, it can be stressful to get all the documentation done or assets liquidated in time to provide this. With an education loan, however, your sanction letter is all the proof you need. Getting one even before your admission is secured can be a big help in smoothing out the visa and admission processes.
So, you see? An education loan actually sets you off on the right foot. It enables you to build a credit history, preserves your family’s savings and provides extra help for your visa and admission approvals. Is it really a question anymore?
