Are you planning to get a student loan? If so, go for. You can avail many advantages. Tax deduction is one of the primary benefits.
Because of the high costs involved in the college and university education, taking out loans for the higher studies has become inevitable. Education loans have become an integral part and parcel of a student’s life. In fact, it has proved to be of immense help and advantage for those students who have poor financial stability, but have the potential and the talent to shine and become successful in future.
You can avail loans from various sources
There are several sources from where you can avail the loans at low interest rates. Both the government as well as private lenders is ready to provide you with the required amount of loan for your higher studies. It is indeed a boon for every student seeking for financial assistance in his or her studies.
Banks and financial institutes are available to lend student loan
There are several banks and financial institutions that offer affordable and budget friendly student loans. In fact, you will also come across numerous government programs and scholarship platforms that will help you to realize your dreams of pursuing higher education. The best part about taking a student loan is that unless and until you are getting a job after completing your studies, you don’t have to repay.
Tax benefit is one of the major advantages of student loan
Tax benefit is yet another advantage those students get when repaying the loans. As known as the student loan, interest reduction can be claimed. While repaying the loan, you can claim for at least $2500 tax deduction in the first 60 months of the loan repayment. In a way it can be said that taking a student loan is beneficial for students with financial constraints.
Tax deduction helps to ease out the financial burden on your paycheque.
You can claim for the tax deductions for the first five years of the loan repayment period. This step is initiated so that the students can settle down in their life with the new job and life with the deducted interest rates on loans. When I graduated and bagged my first job, I didn’t very high salary. If there weren’t any tax deduction, the loan payment amount would have been a very big burden on my paycheque. Thus, tax reduction of student loan is a very big boon and an asset for every student out there and you can benefit as well.
Criteria for the loan
In order to enjoy the tax deduction benefits on the student loan, there are certain criteria that you have to cater to. The loan has to be used for educational expenses only. In case, you have not used for educational purpose, you are not eligible for any of the tax deductions as proclaimed.