What is an Education Loan?
An Education Loan helps students finance their higher studies (tuition fees, living expenses, books) both in India and abroad.
Unlike other loans, education loans typically come with a moratorium period (the course duration plus 6 to 12 months). During this time, you are not required to pay EMIs, though simple interest continues to accrue on the disbursed amount.
Tax Benefits under Section 80E
The interest paid on an education loan is fully tax-deductible under Section 80E of the Income Tax Act for up to 8 consecutive years. There is no upper limit on the deduction amount. This effectively lowers the overall cost of the loan.