People opting for loans note that
1. Tax benefit Under Section 80E, you can claim deduction on the interest paid for a maximum of 8 consecutive years starting from the year you begin repayment. There is no upper limit on the interest deduction.
2. Only interest qualifies Principal repayment gives no tax benefit. Structure your EMI understanding accordingly.
2. Education loans are among the cheapest unsecured loans Compared to personal loans or credit cards, rates are significantly lower. So do not rush to prepay principal unless you have a strong reason.
3. Arbitrage opportunity mindset. If your loan interest is 6.9 percent and you can safely generate 10 to 11 percent post tax through disciplined investing, you are financially better off investing the surplus rather than aggressively prepaying.
Be mindful of these huge loans and be smart about money.
1% extra recurring over 8 years for 50 lakhs is ~4 lakh rupees extra
2% extra is ~ 8 lakh extra.
You are welcome.