Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Loan for Education > Reasons Education loan is preferable than Personal loan

Loan for Education

Reasons Education loan is preferable than Personal loan

Reasons Education loan is preferable than Personal loan

Higher education has become a necessity in today’s extremely competitive world. Attaining education from top-tier colleges across the world has since become the goal for almost every Indian student. But with the price of education at its ever-increasing peak, availing of external finance is the only way to make your way through college without depleting your savings.

Now, there are two financing options that can get you out of this bind. It’s student loan vs personal loan. Which one should you choose? Let’s explore.

1. Moratorium period

The moratorium period refers to the period where the borrower is temporarily exempt from repaying the loan. It essentially provides respite to college students, compensating for the time lag between completing their degree and finding a job. This period usually extends from the time of loan disbursement to around 6-12 months after completing the degree and is only offered to borrowers of education loans. During this period, lenders also calculate interest on a simple interest basis.

In the case of personal loans, however, monthly repayment starts immediately after loan disbursal. There is typically no period of respite, which can become a heavy burden to bear as a student.

Additional Read: Can You Take a Personal Loan and Education Loan Simultaneously?

2. Tax benefits

When it comes to education loans, you can claim tax deductions and recover the interest amount. According to section 80E of the Indian Tax Act (ITA), borrowers can file for tax deductions of the amount equal to the total interest payable. This is a luxury enjoyed only by education loan borrowers. In contrast, personal finance does not come with any such tax incentives.

3. Loan amount

When it comes to personal finance, you can obtain amounts ranging from Rs. 50,000 to Rs. 50,00,000, based on your credit score. On the other hand, you can obtain a loan amount ranging from Rs. 50,000 to Rs. 1.5 crore when it comes to education loans. This again can vary from lender to lender.

4. Interest rate

Interest rate is a key difference between personal loan and education loan. Generally, education loans usually have lower interest rates as compared to loans extended for personal use. Also, the processing fees applicable on education loans are comparatively less, depending on the lender.

5. Loan disbursal

Personal finance is credited directly to your account following the approval of your application. But in the case of education loans, the loan amount is directly credited to the account of the educational institution. Once the university collects the outstanding fee, you can claim the remaining amount, if any, to cover auxiliary expenses.

Additional Read: NBFC vs Bank – Which one is better for an Education Loan?

To sum up

When it comes to higher education funding, “education loan vs personal loan” is a question that comes up time and again. But with lower interest rates, moratorium periods, and numerous other advantages, education loans can be the right choice of financial assistance for your education.

We at Tata Capital offer interest rates as low as 10.99% at flexible tenures to help you pay for your tuition and other educational expenses. Use our personal loan EMI calculator to get started today! 

Apply Now

Add wings to your dream. Apply for an Education loan!

Apply now
Popular Searches
education loan at 0 interest education loan documents education loan eligibility education loan for abroad studies education loan for mba education loan procedure education loan repayment govt education loan application for the loan vidya lakshmi portal
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Important Information

Investor Information

Visit us on:,Visit us on: www.tatacapitalmoneyfy.com,www.tatacapitalmoneyfy.com

Our Private Equity Funds

Amalgamated Companies

Top Branches
Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.