Study abroad loan or self-finance? 4 points to help you choose. 

Not being able to decide between Study Abroad Loan and self-financing your overseas education is a dilemma that not many will face, but it’s still a dilemma that’s hard to find the answer to. So, if you find yourself in this position, you are both lucky and in a spot of bother. But there’s nothing to worry about, as the internet couldn’t have brought you to a better place – this article will give you 4 points that will help you make an informed decision between the two.

1. Locking funds & liquidating funds versus 100% funding.

With a Education Loan In India, you won’t have to lock any of your funds or liquidate any of your assets. This is because most lenders these days will provide you 100% financing. This means you can hold on to your funds and have them ready for family contingencies.

You could even use these funds for investment purposes and earn handsome returns. If you find the right investment instrument, the returns you earn could even outweigh the total interest you’d have to pay towards the student loan.

2. Tax benefits of study abroad loan.

When you take an overseas education loan, you get complete financial assistance. Everything from the course fees, to the travel expenses to reach your study destination, to the cost of books or a laptop, examination fees, entrance exam charges and deposits will be covered with just one loan.

However, besides these benefits, an overseas education loan also gives you access to considerable tax benefits. This is because, under section 80E of the Indian Income Tax Act, the interest amount you pay in a year towards a student loan can be used to claim tax deductions. The best part is that there is no limit on the amount of deductions – that means that you can claim entire interest amount in a year.

3. Good for your credit score.

Your credit score is a very important number and could play an important role in your future borrowing endeavors. Have a good credit score and loan offering will be made available to you without any hassles. Moreover, a good credit score will ensure you get higher loan eligibility and lower interest rates if and when you need to take a loan of any sort in the future.

A student loan can be very useful in this regard, because successfully repaying one will surely improve your credit score. However, if you choose to self-finance your overseas education, your credit score is unaffected. Moreover, if you don’t have any other debt instruments, you might even have a credit score when you finish the course.
 
4. Deal with inflation & forex rates.

A study abroad loan ensures you never have to worry about inflation that could a wrench in your financial planning. You could put aside the funds you need at the start of your course but after a year, the price might go up and then you’d have to make arrangement to get the required funds. This is also the case if the forex rates go against your cause during the course of your education. This is something you don’t have to worry about with an overseas education loan.

Hopefully these 4 points will help you settle any confusion you between a study abroad loan and self-financing your further education plans. Good luck with your studies and all the best!