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When you take an education loan, the repayment is a crucial aspect of the loan. The loan repayment done on time will reduce the cost of debt and if delayed any further the loan cost might increase rapidly. If you take an educational loan the average tenure of the loan is fifteen years and the interest component is an integral part of the loan.
If you get a job after completing the course of study then you might want to start paying off the loan. This way you can reduce the interest component of the loan. It is difficult to pay the loan early as the installments will increase in this case. Hence planning your repayment is a must.
There is a moratorium period for educational loans and the repayment will generally start after the loan and the moratorium period ends.
These are the steps you can follow to repay the educational loan:
- Get an internship during the course period this will help you to accumulate money and pay off the loan amount.
- While studying abroad, there are summer breaks that can be utilized for internships or doing part-time jobs. Using this time will help you earn money as well as study in the meantime.
- There are schemes for women who are studying abroad and also scholarships that can be utilized for faster repayment of loans
- Since interest is calculated on the total loan amount it is advisable that the loan should be taken in installments.