5 Top Benefits Of A Bank Education LoanCollege education is getting more and more expensive and for many families the only solution is to get financial help from institutions and the government. There are many financial aid options from the federal, state and private levels but the competition for slots is fierce. For many who do not meet eligibility requirements either financially, academically or for a host of other criteria, a bank education loan may be the solution to college expense woes. Many banks have loan facilities expressly designed for college education funding. Here are some of the benefits of getting a bank education loan vis a vis the other forms of college tuition help: 1. Bank education loans are processed faster than federal or state-sponsored education loans, practically instantaneously with some banks. Eligibility requirements are usually fewer and there is no need to accomplish the Free Application for Federal Student Aid (FAFSA). Application may be online or over the phone. 2. Fewer fees are imposed and funds are paid directly to the loan applicant. Most banks impose no penalties for actual use of the funds other than for college expenses. The banks only require that the applicant is enrolled or about to be enrolled in participating schools. 3. Banks have special programs for educational loans which may have tax benefits. Moreover, special interest rates apply and payments are deferred while the applicant is still attending school. Loan terms can be extended for up to 20 years. 4. Many banks have no loan limits other than the projected educational costs less any financial aid received. Certification regarding this will be required from the school. 5. Satisfactory academic progress is not a requirement for eligibility or continuity of loan eligibility. Because banks are commercial entities, customer service is usually very good and clients enjoy more flexibility than when applying for federal or state-based financial services. Bank education loans can also translate to savings from tax breaks as described in the IRS Publication 970 which specifically addresses educational loan interest payments. The deductions are not applicable to everyone, requiring income limitations and eligibility of the loan proceeds beneficiary. However, if eligible, the deductions can be applied to the income tax. Tax credits are also available specifically the Hope Credit and Lifetime Learning Credit, which in turn may also be applied against taxable income for the initial two years. Many banks also give additional discounts for prompt payments or for automatic debit agreements that assures regular loan payments. Federal-sponsored loans such as the Federal Stafford Loans may also be availed through commercial banks at zero origination fees, reductions for timely payments and facilitated application process. Bank education loans do not require long-term investments as is required in Mutual funds, 529 college savings plans and custodial plans. The financial assistance comes in a timely manner for people who qualify for loans at the best available rates. Parents have the flexibility to use available funds for priority expenses, and cost-of-money savings may well exceed any income generated from federal or state-sponsored college savings plans that have many restrictions and tax consequences and penalties for noncompliance. Moreover, the monthly payment for bank education loan is designed based on the client’s capacity to pay. For many people in these uncertain times, a college education may best be financed by a commercial bank education loan which is driven by market forces. |