Study abroad education loans: Repayments and options
What about repayment of loans?
Students opting for an education loan should be mindful of the repayment factors. Keeping finances in order is essential to clear the student loan seamlessly and simultaneously build a good credit score right from the beginning.
Planning the repayment strategy should start from the moment the student takes the loan.
Therefore, as a student-centric organisation, we encourage our students to pay a small portion of the interest component in the form of simple interest (“SI”) or partial interest (“PI”).
The student community must remember that the grace period offered by several financial institutions is not an interest-free period, as interest begins to accrue from day one.
Additionally, paying off SI/PI during the course instils financially prudent habits early on. A thought-through approach should be implemented to plan a robust education loan repayment strategy to pay off the borrowed amount.
What are the repayment options?
Simple Interest servicing during the course: Students can pay simple interest during the study program.
Partial Interest servicing during the course: Students can pay partial interest while pursuing their education.
Equated Monthly Instalment (EMI): The EMIs, including the interest, will start post-completion of higher education.
Why is loan for higher education a good option?
With inflation and rising tuition fees, foreign education has become an expensive affair.
However, an education loan is a prudent choice for students to finance their education independently. Utilising personal savings can empty the parents’ savings corpus, which they can otherwise use for contingency.
A student loan is one of the ideal ways to fund education independently. It helps students earn the self-made badge and ensures the credit is available to them when they need it the most.
Education-focused Non-Banking Financial Companies (NBFC) NBFCs such as Avanse Financial Services Limited enable students to pursue a wide range of courses.
