An overview of the education loan repayment process

Lenders offer education loans to people who wish to seek higher education whether overseas or in India. Education Loan Repayment is one of the important factors you should keep in mind while applying for an education loan. Various applicants look for the education loan repayment process from the lenders they wish to take an education loan from, even before applying for a loan. The repayment policy varies depending on the lender you choose to take an education loan from.

You can use an EMI Calculator to know the amount for your monthly installments and the interest rate of your education loan. You can use the EMI calculator for free by visiting the websites of lenders and NBFCs who offer education loans.

Read below to get an overview of the different aspects of the education loan repayment process:

What is the moratorium period?

The moratorium period or holiday period is a unique feature of education loans. Lenders offer you a 6 month time period after you have completed your course or 3 months after you have obtained employment to start your education loan repayment. Lenders generally provide a holiday period so that you have enough time to start collecting the funds for repaying your education loan. The policies regarding the moratorium period could differ from lender to lender.

When should you ideally start repaying your education loan?

Even though you are given a moratorium period, it is better to start repaying your loan as soon as possible. The holiday period given to you by the lender is not interest free and the interest rates in India are quite high. This means that without decreasing your outstanding loan amount, you just increase the interest and the cost of your loan. Besides this, you can also get a good credit score if you start the education loan repayment early. Good credits score can help apply for another loan should you need it.

What is the process of repayment of an education loan?

There is not much you will need to do for the repayment of education as it is not that big of a process. There are options you can choose from such as EMI repayment during the course, EMI repayment post holiday period, partial interest servicing during the course or interest servicing during the course. You can choose any one from the various options and inform your education loan provider. You can get in touch with your education loan lender and tell them about your preferred choice. The lender will ask you for your account details and set up your repayment process for you.

Repayment policies may differ between lenders

The repayment policies for an education loan can be different depending on your lender. Before applying for an education loan, make sure you compare lenders to see which education loan repayment policies suit your needs the best. You can find the necessary information about repaying education loans by visiting the websites of the lender you wish to take a loan from.

We hope this article has been helpful and has provided you with the information that you were looking for. Thank You!