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How To Manage Your Education Loan Emi’s?

By Author: Neha Sharma
Total Articles: 1053

Education loans are essential for students who wish to pursue higher studies or go abroad to complete their education. Most banks now provide these loans to students, but also charge a substantial interest when it comes to paying back the sum. While taking a loan itself may be easy, paying off the debt may prove to be difficult for some students.

The bank usually allows the student some time after he/she has completed their education before asking for the EMI repayment. This period of time is known as repayment holiday. Usually the bank allows a period of one year from the time of completion of education to the time of the first EMI payment. However, this period may be shorter if the student manages to get a job within six months of the degree completion.

Here is a look at some of the guidelines to follow if you want to manage the repayment of your education loan in India.

Ways to reduce burden
For education loans above Rs.4 Lacs, the student has to pay a certain percentage of the expense, while the rest is lent out by the bank. For studying in India, the student has to pay 5% of the loan while for education overseas the student has to furnish 15% of the expense. However, if you are a good student, some banks may relax these rates.

It is also better to take the loan amount through small payments over time instead of taking the entire amount at once. This reduces the interest that you will have to pay once the repayment period starts.

Start saving prior to repayment
If you have taken out an education loan, it is highly advisable that you start saving money during your education. You can opt for a part-time employment in order to start saving early. The repayment holiday can also be utilized to save up enough money so that there is no issue while repayment of the debt.

Keep an eye on the rate of interest
Education loan in India is given out on a floating rate of interest. This means that the rate of interest may change over time. So, it is highly recommended that you keep a backup savings for emergencies if the rate of interest suddenly escalates. However, to do this, you need to earn enough to save some money after paying EMI and meeting monthly expenses.

These are some of the easiest ways of ensuring that education loan EMI does not get too difficult to manage. Keeping expenses in check during the loan repayment tenure is the best way to handle the burden of the loan.


Author Bio:- Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about the EMI calculator and why is it important to calculate the EMI. Through her work, she provides valuable information on how to manage your education loan repayments

Total Views: 32Word Count: 480See All articles From Author

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