What is better for a child's future: an education loan or an education plan
Updated On Mar 12, 2022
It's impossible to predict a child's future financial demands, and many parents mistakenly believe that a school loan will save them. Although an education loan may be a viable option, it cannot replace the need for investment in order to achieve the objective, since the kid may require aid in other areas as well. While regular income can cover tuition and other costs, the cost of more education is a different story. Given the difficulties of forecasting a child's future demands, as well as the high cost of a career-defining education, such as tuition, books, entry, and other expenditures, which option would you choose: an education loan or saving for a child's education? (Educational Strategy)
Education Loan vs. Education Insurance Plan
To meet their financial obligations, many parents choose a student loan, while others opt for an education insurance plan.
Education loans may only be used to pay for your child's education; however, saving for the future can cover both your child's education and other expenditures.
Education loans may be able to assist you in spreading the cost of your child's education over a longer period of time. An education insurance plan, on the other hand, will prudently save and invest your money to guarantee that your child's educational and other demands are met.
A student debt, like any other loan, is a financial burden on your child and, by extension, on you. You must return the loan in equal monthly payments (EMIs) as soon as your child completes his or her studies and finds work.
More money comes with investment. You can invest in corporate bonds, government securities, equities, and a variety of other assets if you pick a ULIP plan. If you wish to invest for a longer period of time, say 20 years, you may change the premium from shares to loans after 15 years to protect yourself from market swings.
Plans that include education costs Your family, especially your child, is deserving of your love and care. Invest (and reinvest) in a family insurance plan to guarantee that everyone is protected. In the case of an unexpected incident, your family can receive the insured amount as emergency death protection.
When opposed to school loans, child insurance plans provide a slew of tax benefits.
Above all, education insurance policies enable you to avoid repaying your obligations. You can also withdraw some money now and put the balance in an investment account to spend later.
So, if you're a new parent looking for a mutually beneficial plan that allows you to save and reinvest for the benefit of your child in the future, this is the plan for you. Consider obtaining an education plan for your child. You can take out an education loan if you have enough money and no intentions to increase it; nevertheless, the peace of mind that comes from saving and investing your hard-earned money is precious to you and your family. Finally, an education or ULIP plan is an excellent method to protect as well as invest. You also give your child financial stability, allowing you to pay their fundamental needs such as schooling, therapy, and other minor bills.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.