Tuesday, January 8, 2008

Education Loan Queries

Q - Is education loan tax free?

A - If it is for a course which is of a kind or similar to the one mentioned in section 80E, the interest paid is eligible for tax deduction benefits.

Q - What is amortization?

A - It is the process of knowing the break-down of the EMI(Equated Monthly Installments) into principal and interest components of a loan repayment. It also lets you know how much of your loan is outstanding and how much of your EMI is towards repayment.

Q - Something about study or education loan.

A - Any person can avail a loan for his/her studies both in India as well as abroad for up to Rs. 15 lakh. Banks offer loans up to Rs. 4 lakh without security. Providing collateral or security is mandatory for loans above Rs. 4 lakh. The loan covers the cost of travel, lodging, books, tuition fee etc.

Q - What is GPA?

A - GPA or "Grade Point Average" is a long-term indicator of a student's future performance. Generally, most master's courses require a minimum of GPAs of 3.0 or 3.3, and for the Ph.D. courses require minimum GPAs of 3.3 or 3.5.

Q - Can bank officials reject an application for education loan?

A - Banks can reject loan applications if doesn't meet their eligibility criteria. Taking a loan against property or securities like jewellery, life insurance policies with high surrender value, shares, mutual fund units etc can ensure that it doesn't get rejected.

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