If you acquire a job after finishing your studies, you will have to repay the Equated Monthly Installments (EMIs) if you took out an education loan. Because student loans can last up to 15 years, the interest rate might be significantly higher than you might imagine.
However, you may lower your interest payments by paying off the loan early. Paying your student debts before the due date might be tough. You may, however, make your loan payment if you prepare ahead of time. This essay will explain why and how you should repay your education loans early, as well as the benefits of doing so. Continue reading.
Why Should You Repay Your Education Loans Quicker?
Delay in Repayment of a loan deducts a considerable percentage of your monthly paycheck that could be used to attain your financial objectives. It prevents you from changing jobs since it will be difficult to handle the payment. Delays in IIFL payment repayments place a significant strain on the borrower, especially while your credit history is developing. If you borrow INR 20 lakh for 15 years at an interest rate of 9.45% per annum, the interest amount you would have to pay loan of INR 17,48,355. And if you pick a 10-year term, your total interest paid would be INR 10,98,975. As you can see, paying off the debt early might save you up to INR 6,49,380.
How to Repay Education Loan In India
Paying off the student debt ahead of schedule will need preparation and execution. Let’s have a look at the approaches you should take to receive early payment.
- Start Early
One of the most important factors to consider while shopping for an education loan is repayment calculation. It reduces your interest payments by 0.50% by lowering the interest rate. Yes, some lenders provide interest payment relief on college loans if you pay within the moratorium period.
- Select a Loan with a Relatively Shorter Term
Paying extra is one of the simplest methods to pay off student debt sooner. You can do so by opting for a shorter payback period or repayment of the loan. When choosing a shorter term, the EMI may be greater. So, don’t shorten the loan term to the point when making monthly payments becomes difficult. Choose a loan with a shorter term to help you pay off your debt faster and save money on interest payments.
- Take into account Balance Transfer.
You may also check into loan consolidation to acquire lower interest rates. Negotiate a reduced interest rate with your current bank, and if it does not agree, use a balance transfer option. When you pick a lender with a low-interest rate on your school loan debt, you might save a significant amount of money on interest. You can have the same EMI to save more on interest payments. This will shorten your term and help you lower your interest obligations. and you can use the Bajaj Finserv app to make Quick IIFL loan payment with multiple payment methods.
Conclusion
Most students aim to return their student debts as quickly as possible. As a result, they choose shorter loan terms. We constantly urge our students at early loan payments to choose lengthier loan terms. It is critical to account for financial contingencies while preparing for student loan repayment.
