Education loans without collateral: A tax-friendly way to fund your master’s degree

Pursuing a master’s degree abroad is a dream for many, but financing it often becomes a challenge, especially for international students without significant assets to pledge. Prodigy Finance offers a unique solution: international education loans without collateral, enabling students to achieve their academic goals without the stress of providing security. Beyond convenience, these loans come with an added advantage – potential tax benefits that can make your overseas education more affordable.

Why choose loans without collateral?

Education loans traditionally require collateral—assets like property or savings that serve as security for the lender. However, international students often lack such resources, creating barriers to higher education.

Loans to study abroad without collateral are a game-changer. With Prodigy Finance, students can access funds based on their future earning potential, not current financial assets. This opens the doors for students worldwide to achieve their dream of studying at top global universities. Prodigy Finance also offers new co-signer loans for Indian students, providing even more flexible financing options.

Key advantages:

• Competitive interest rates tailored to students.

• Flexible repayment plans aligned with expected earnings.

• Tax-saving opportunities through interest payment deductions.

Tax benefits of education loans without collateral

One lesser-known advantage of foreign education loans without collateral is their potential to reduce your tax liability. Here's how:

1. Deduction on interest payments

The interest paid on education loans for international studies is eligible for tax deductions under many tax jurisdictions, including India (under Section 80E of the Income Tax Act). Unlike other deductions, there’s no upper limit on the amount you can claim for the interest component.

2. Extended Deduction Period

In many countries, including India, students can claim interest deductions on education loans for several years after repayment begins. For example, in India, this deduction is available for up to eight years, providing a significant financial relief. This extended timeframe helps graduates manage their loan repayments more effectively while they establish their careers.

3. Supporting future earnings

Investing in education not only boosts your earning potential but also helps save on taxes during repayment. With structured repayments and tax benefits of education loans, the financial burden becomes manageable.

How Prodigy Finance simplifies financing study abroad

Prodigy Finance specialises in providing student finance for study abroad, designed specifically for international students. Here’s what sets them apart:

1. No collateral requirement: Your future earning potential is the primary consideration.

2. Customised repayment options: Flexible terms that match your expected income.

3. Global reach: Loans available to students in over 150 countries.

4. Tax advantages: Interest payments on these loans can be claimed as deductions, reducing overall costs.

5. Co-signer loans: A great option for Indian students to secure funding with a co-signer, potentially unlocking better rates and higher loan amounts.

By offering student loans for international students, Prodigy Finance empowers you to study at prestigious universities without financial stress.

Common myths about non-collateral loans

Myth 1: These loans are expensive

Truth: While interest rates may seem higher, the tax benefits (vary by individual eligibility) and future earning potential often offset the costs.

Myth 2: Only certain universities qualify

Truth: Prodigy Finance covers a wide range of globally recognised institutions.

Myth 3: Repayments are rigid

Truth: Flexible repayment terms ensure you can manage payments comfortably based on your income.

Steps to secure a loan with Prodigy Finance

Step 1: Apply online - Create an account and apply to any of our supported schools.

Step 2: Receive your offer - Get a non-binding provisional offer, valid for 14 days.

Step 3: Verify your documents - Accept the offer and upload the required documents. Once verified, we'll match you with available funding.

Step 4: Confirm your loan - After funding is allocated, accept the offer and pay a USD 500 processing fee to finalize your loan.

FAQs

Tax benefits vary based on individual circumstances and local regulations. Prodigy Finance does not provide tax advice. Students should consult a qualified tax professional to understand their eligibility and potential deductions.

Loan and promotion offers are subject to our eligibility, funding, and credit assessment criteria. The loan amount is subject to the cost of attendance limits set by schools.