Over the years, the value of
education has risen. It has become difficult for the noteworthy students from economically
backward section to avail of quality education. This is where an education loan plays an important role. It has stabilised the
finances when opting for higher education. The repayment structure is slightly
different from other investments, like home loan and personal loans.
Lenders also provide the
facility of moratorium or waiting period after which the applicant can start
paying the interests and principal amount. The moratorium period generally
extends from six months to one year after getting a job. However, it is ideal for
planning the finances for student loan before the repayment phase.
Let us look at some features
that can ease your study loan EMI –
Interest
repayment: It is better to start the
repayment early. You could pay the interest amount during your study phase. At
the time, the interest charged is only the interest, which lowers the repayment
burden drastically. From there, the EMI is purely directed to principal amount.
Additionally, the lenders could also provide some interest subsidy if you
regularly pay the interest amount during the education period.
Tenure extension: Generally, the tenure for a study loan is between one to seven years. In case you face an unexpected
circumstance, you can request for an extension. Consequently, the repayment
period extends to 10 to 15 years and the EMIs decrease. The lenders,
nevertheless, believe you only if you start earning soon and if the crisis is
temporary. Do note, and the interest rates could go up owing to the long term.
Moratorium period
extension: You can extend the waiting
period by six months to one year if needed. You need to convince the lender as
to why you have not got a job in hand. It also helps you to build your credit
score.
Top-up loan: If you want to study further after the completion of
the current course, you could take a top-up credit. This additional investment
could delay your repayment. You may also need to pay comparatively higher
interest amount.
Optimise
internship stipend: You could
accelerate your loan repayment by channelizing your internship stipend and
annual bonuses towards it. However, remember, some lenders charge a penalty for
the same. Hence, before making a part or full pre-payment, assess your
financial condition. In case you earn a lot and have funds left after paying
off the EMIs, save the money to create a buffer. This way you can repay the
loan if the interests rise.
Overambitious
EMIs: If you want to get rid of the
credit as soon as possible, avoid going for very high EMI. You should go for
balanced EMI which you can manage despite a low salary. Remember, your EMIs
should not exceed 40 per cent of your current income. For this purpose, every
portal has an education loan EMI calculator at the perusal of the consumers. You need to add your
amount, tenure, and interest rates value to determine the monthly instalments
towards the credit. The results are accurate and do not involve any
miscalculation as compare to an excel calculator.
