A Guide On Education Loan Repayment

A Guide On Education Loan Repayment

It can be challenging to pay for your education out of your own pocket due to rising tuition costs. This is where education loans can save the day. You can now separately pay for any degree-related expenses and repay the money in manageable installments. The majority of students may be concerned about their education loans if they are not planned for carefully. Students who lack good preparation view repayment as a significant obligation, thus it is important to plan everything carefully, from choosing the bank to repaying the education loan. It is necessary to comprehend the bank’s policies and conditions in order to arrange the repayment of student loans. Read this post to learn in-depth information on repaying student loans and how to organize your repayment strategy effectively.

How does the loan repayment work?

We must first comprehend what a moratorium period entails. It refers to a certain time within the loan’s term during which you are excused from loan repayment. However, depending on the requirements of the lender, students can also be required to pay interest during this time. EMI repayment doesn’t start until after the moratorium period.

Most lenders have different rules regarding how to repay education loans. The majority of NBFCs provide a moratorium period, but it is not the free time from payments. As soon as students get their loan funds, they are required to begin making interest payments. However, NBFCs do provide the opportunity to pay only a portion of the interest due each month.

However, in order to avoid accruing interest at the conclusion of your term, it is preferable to make full payments each month as opposed to partial ones.

How to repay your education loan?

Start paying early

Use an online education loan EMI calculator to have a thorough understanding of interest rates and conditions. Early calculations of student loan repayments can assist you in creating a budget that works for the EMIs. Once you have everything figured out, apply for the loan.

Start making payments while the moratorium is still in effect if you want to pay off your student debt swiftly. Choose places where you can save money and apply that money to your loan payments. By doing this, you can pay off your debt early and save a lot of cash on interest.

Build a budget

Create a budget that eliminates all the ostentatious costs from your monthly spending. Eliminate unnecessary spending and only make the necessary purchases. Pay off your personal debt with the money you saved. Spend responsibly now so that you can eventually live comfortably without the weight of education loan debt.

Pay more

When you can pay more than the minimum monthly installment. This additional funding lowers the principal balance and lowers interest. If you have the money, you can also decide to partially or fully repay your loan. Prepayments, however, can result in fees, so proceed with caution.

Opt for fixed rates

As students need to understand how education loan interest rate can impact their EMIs, we urge them to choose fixed interest rates over fluctuating interest rates. While floating interest rates are liable to vary based on economic circumstances, fixed interest rates are fixed in nature and remain the same throughout the term of your loan. Students who have already chosen floating interest rates attempt to comprehend how interest rates alter in response to market changes.

Utilize tax benefits

Students who borrowed money from Indian banks for their studies are eligible for the Section 80E tax credit. Candidates who have taken out student loans and are repaying them are permitted, under Section 80E, to claim a tax deduction for the interest they are paying on those loans.


If one wants to attend a prestigious university, education loans can be quite helpful. Banks also give money to students who match the criteria for receiving an education loan. You can meet all of your financial needs and ensure a bright future with the aid of education loans. Many banks and NBFCs offer competitive interest rates. They can create a loan program that is tailored to your unique needs, from hostel fees to course materials.


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