Check Out These Important Points Which Help Repay Education Loan Against Property

Indian education sector is predicted to reach a market of nearly Rs. 7,000 billion in FY 2019. Such progress in this sector is reflected via an improvement in the Gross Enrolment Ratio in higher education to 25.8% in 2017-18 and a predicted 30% by 2020-21.

However, a significant hurdle in its path is the rising cost of such courses and several other auxiliary expenses. In an attempt to meet this increasing expenditure, multiple reputed financial institutions offer education loan that provides its borrowers with access to considerable funding along with no end-usage restriction.

This advance offers its borrowers with a host of benefits including a convenient repayment structure and nominal education loan eligibility. However, considering that such education loan against property for abroad studies involve a hefty credit amount and are long-term financing options, potential borrowers need to take into account.

The Following Pointers To Effectively Repay Your Existing Loan –


  • Opt For Part-prepayment When And If Possible


Considering the hefty amount of up to Rs. 3.5 Crore that can be availed under education loans, it is ideally preferable if the borrower can part-prepay the loan amount when and if possible. Part-prepayment lowers the principal amount, the interest amount paid towards the loan will reduce since the interest of the loan acts upon the principal amount.


  • Decide Upon A Suitable Loan Tenor Of Repayment


The tenor of your education loan plays a crucial role in deciding its EMI. Make sure to use an EMI calculator to determine the best repayment tenor depending on the principal amount, interest rate, and your repayment capability.

Also, take into account your existing financial obligations, determine the ideal tenor of your loan against property, and decide upon an EMI that does not strain your budget.


  • Choose To Go For A Balance Transfer Facility


The extended tenor of an education loan (from 2 to 20 years) and access to a high-value loan amount makes it a mandate to opt for lenders that offer a competitive rate of interest. In case of higher interest rate, there is a considerable piling on the total cost of credit that makes it difficult to repay.

Under such circumstances, make sure to opt for a balance transfer facility to shift the credit account to lender that offers a reduced interest rate. Additionally, with a suitable lender, education loans may also fetch you the added advantage of tax benefits under Section 80E on the interest paid towards the loan. This tax deduction is capped at Rs. 1.5 lakh.

In case of approaching leading lenders also enjoy the added advantage of availing a Flexi Loan facility. Under this, individuals pay interest only on the withdrawn loan amount and repay as per their convenience. Such benefit of a Loan Against Property makes it a preferred financial option for students.

Additionally, such NBFCs also offer their borrowers with an added incentive of pre-approved offers that ease the application procedure to avail financial assistance. These offers are available on numerous financial products, including Home loans, personal advances, business loans, etc. You can take a look at your pre-approved offers by providing only some  essential details.


  • Automate Your Instalments


Delayed or missed EMI of the loan often end up attracting a considerable penalty. It adds up to the cost of credit and also affects your credit history. To avoid this from happening, individuals can make sure to opt for automated EMI payments via ECS or NACH. It ensures your timely EMI payment throughout the loan tenor.


  • Look Out For An Income-Based Repayment Plan


Leading NBFCs often provide advances that come equipped with income-based repayment facility. Opting for this ensures that borrowers usually pay a reduced monthly instalment amount that is as low as 10% of their monthly income.

Such lucrative features and pointers on repaying this education loan for studies abroad accompanied by proper utilisation of the credit amount makes it a preferred option to manage your finances better while studying abroad.

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