An education loan is a loan or funds obtained by an individual to pursue higher education in India or abroad. Loan repayment begins to be made to the student upon completion of his or her studies, and a period of 6 months is given as a grace period for the student to obtain or join a job. The repayment amount will be determined by your choice of interest rate, you must decide how you want to repay the loan. That is if you want to initiate payments during the hold period itself or after the hold period. The deferral is your study time plus 6 months or 1 year to get a job. Only after this time will you be able to repay the loan. Loan interest begins to accrue by the time the money is distributed, so by the time you graduate, you have a large amount of money to pay back. Another option is that your parent or guardian can begin paying off the loan during a forbearance period for which the loan is charged simple interest.
Paying a reduced interest rate should be on your priority list if you want to cut your student loan EMI payments. Banks and non-bank financial institutions (NBFCs) offer school loans with interest rates ranging from 9 percent to 14 percent, just like any other loan. Unlike a fixed-rate mortgage, though, the interest rate on your education loan can be negotiated.
Here are some suggestions for getting a better college loan interest rate: -
Create a Education Record. The rate of interest is influenced by your academic record, the institution you attend (in the case of MS), and the college you choose to study in. Maintain a positive profile so that banks will be eager to lend you money at a cheap interest rate.
Do your homework. Before you go to the bank and ask for a reduced interest rate, ask yourself a few questions. Are you able to supply a piece of collateral? What is the income of your co-signer? How long will you be repaying your debt? Interest rates can be negotiated based on these considerations.
Also, compare the interest rates of various banks and NBFCs; select one with a low interest rate and use it to bargain with their competitors; if your profile is impressive enough, banks will be eager to drop their interest rates.
Apply as soon as possible. If you have an excellent GRE score, apply to banks before applying to colleges. Students who apply early have the advantage of comparing several banks and having more time to negotiate a low-interest loan.
Carefully calculate the costs. Try to be as accurate as possible when calculating your expenses. The loan quantity might have an impact on the interest rate. The interest rate rises as income rises.
Transferring the balance. Transferring your school debt from one bank to another is another option. You can save money if you are successful in obtaining a cheaper rate than the bank from which you would be transferring after refinancing.
