Balance Tax Benefits And Repayment Burden Of Your Education Loan

  Author: Jai Prakash

Once you have taken the benefit of the education loan by taking the higher education course of your choice, you need to deal with your repayment obligations. True, you get annual tax deduction for the interest payment for your education loan under Section 80E, but the repayment still pegs your investment plans for future needs. When you are repaying an education loan, you are busy paying for your past instead of planning for the future. So, what should be your approach towards the repayment of your education loan?

Repay education loan at the earliest After the education loan moratorium, you can start repaying the education loan. You can pay as per your income in a particular year. So, if you are getting into a higher tax slab, you can come down to a lower tax slab with enhanced education loan repayment. This is likely to be true for those in their early career. If you had taken a mid-career course and have benefitted with higher pay after the new educational training, you can step up the education loan repayment as well.