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. It 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 can also provide a moratorium, or waiting period, during which the borrower may begin paying the interest and principal. After having a job, the moratorium period usually lasts six months to a year. It is, however, perfect for budgeting for student loans before they are due to be repaid. Here is where the education loan interest calculator can help the students.
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 the 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 an education loan is between one to seven years. In case you face an unexpected circumstance, you can request 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. To know about tenure extension, an education loan interest rate calculator can come to your aid.
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.
Optimise internship stipend: You could accelerate your loan repayment by channelising 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.
If 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 a very high EMI. You should go for a balanced EMI, which you can manage despite a low salary. Remember, your EMIs should not exceed 40% 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.
All About Bank And Loans in India 