New Delhi, India (PressExposure) July 09, 2009 -- In a new development after the declaration of Union Budget, it seems that the education loans portfolio is getting broader as the leading banks of the country are looking forward to providing these loans for two-wheelers and computers for the students apart from their tuition fees.
State Bank of India, the largest bank of the country, for instance provides the expenses of Rs.50,000 for computer and two-wheeler along with the education loan. Education loans are cheaper than the auto loans or consumer finance and the consumers are expected to avail the loans keeping this in mind.
Education loans which comes with more tax exemptions than any other loan has till now benefited only those students who goes for full time graduation and post graduation courses but now according to the new budget, education loans would also be available for the job oriented vocational courses for the duration till a student is through with senior secondary exams.
One can make claim for tax deductions if he/she has availed an education loan for child of spouse. The tax breaks comes in effect at the time when repayment starts and goes on for the term of 7 years. The tax deductions are enjoyed by an individual on the interest paid for the loans and not on the principal.
The current interest rate on the educational loans is set between 10% to 15.75% for which the repayment period is decided as 5 to 7 years and its repayment period starts after six months of getting employed or 1 year after completing the course.