Any meritorious student in India who wants to study for higher education can apply for an education loan. Even the economically backward sections of the society can avail education loans under the government-sponsored subsidy schemes. Federal Bank also offers education loan facilities for pursuing various types of courses which includes graduation, post-graduation, diploma and other courses offered by reputed institutions in India as well as abroad.

Benefits of availing education loans include following:

1. Lower interest rates
When availing on any loan from financial institutions like Banks and NBFCs, interest rates play a key role in the decision. The interest rates for education loans are generally lower across the country. 

2. Flexible Repayments
Another bigger advantage of education loan is that the loan amount need not be repaid immediately. Loan period can be Moratorium period+ 15 years as repayment period (Moratorium period will be course period + one year). This makes it easy for repayment. EMIs can be scheduled to commence after Moratorium period. That can be a relief for students, making it easier for to pay back the loan themselves once they get a job.

3. Covers various costs related to the courses
Costs covered under education loan includes Fee payable to College / School, Hostel, Tuition, Examination, Library, Lab, Cost of books, equipment, instruments, Uniform, Travel expenses, Computer (if essential for the course), Expenses for study tours / project work / thesis etc; Caution deposit, amount payable towards building fund, refundable deposit etc supported by bills / receipts but cannot exceed 10% of the tuition fee.

4. Tax Benefits
Income tax exemptions are another great benefit of education loans. The interest paid on the loan is completely tax deductible, under Section 80E of the Income Tax Act, 1961. This helps a young professional who availed education loan save some money during the repayment period. Please note that there is no tax benefit on principal repayments.

5. Helps to build Credit History
Timely repayments of education loan help to build the credit history of the borrower and enhance his ability to access credit facilities in future.

5. Teaches Responsibility
Another important benefit of Education loan is that it helps to teach a student to take responsibility for his/her studies. Apart from saving their parents from a great financial burden, taking on a student loan also ensures that the students are fully invested and committed to their studies. Taking an education loan can liberate parents from financial burdens as the student is responsible to repay his education loan after the completion of his studies and the moratorium period.