Education has become a costly affair in the present time. The need for making education affordable for all is increasingly gaining priority in the Government's checklist of prime concerns. In this context, the Government has come up with many proposals for modifications in the existing education loan system.
While one scheme aims to grant education loans at rates as low as 4% another aims at slashing interest payment during moratorium period and still another gives tax concession on education loans for all streams of study including vocational courses.
The recent scheme which the Government is planning to bring about is one which would facilitate borrowers to access loans at as low as 4% rate of interest. The scheme has been chalked out by the Ministry of human resource development (HRD).
New features of education loan
Rate of interest: According to the proposed scheme, the rate of interest charged to different borrowers would depend on the income level of their parents. Compare current Education Loans here.
Students whose parents have an annual income of less than 4.5 lakhs would be granted loans at 4%.
The interest rate would be 7% for those students whose parents' income is more than the 4.5 lakh threshold but the loan amount sought is less than Rs. 12 lakhs. Loans amounting to more than Rs. 12 lakh would be charged an interest of 9%.