The total outstanding education loan amount in India stands at Rs. 67,641 Crore as of June 2019. With the economy in the condition that it is in, repayment has become a legitimate hurdle. The RBI reports that the credit appetite of Indian students is reducing at a rapid pace. Precisely a year ago, i.e., on July 2018, the total outstanding education loan amount in India was Rs. 70,117 Crore.
According to the research and confirming the scenario India’s literacy rate stood at an impressive 74.04%. For the Student who want to study higher can avail education loan for further studies. One of the primary reasons behind the curtailed demand for education loan terms from the students’ inability to repay. According to IBA sources, NPA in education is as high as 25% in some cases.
So, here are a few tips that can help you repay your higher education loan against property with ease.
- Part-prepay a certain percentage of the loan amount whenever you come across a windfall. It will reduce the outstanding principal amount, which in turn will result in lower interest payment on EMIs. Part-prepayment and foreclosure charges are some of the things you need to know before applying for a loan against property for education.
- Consolidate all your existing debts into one. It’s easier to pay one EMI instead on many, and may also cost you less depending on your negotiating capability.
- Take up a job which offers repayment assistance. It’s an emerging trend in several companies, and you should take advantage of it if you are eligible.
- Determine the ideal tenure for your loan against property for education. When possible, opt for a shorter tenure. While a long tenure reduces the EMI amount, your interest component increases significantly. In the end, you end up paying much more.
- Opt for a balance transfer facility to a financial institution which offers a lower rate of interest. If you maintain a high credit score, the chances are that your existing lender will come to the negotiation table and reduce your interest rate themselves.
How Does Education Loan Help?
In the current economic situation, higher education, both in India and abroad, is quite costly. Most private and public universities have steep course fee structures, which a majority of students fail to meet on their own.
Even government-backed institutions like the IIMs charge upwards of Rs. 15 Lakh for an MBA degree. Arranging for such a large amount in a relatively short time has deterred many students from getting admitted to their favourite college or university.
Education loans have assisted countless students in meeting their financial obligations related to higher studies. As a financial tool, education loans are not the oldest of the lot. The Indian Banks Association (IBA) formulated and introduced these education schemes back in 2001.
Since then, these advances have enabled thousands of students in paying their financial dues to avail higher education. These loans can not only pay for the tuition fees but also bear the cost of other related expenses such as hostel fees.
If you avail a loan against property for education in India, you can get your hands on up to Rs. 3.5 Crore, which is more than enough to meet all your financial obligations related to studies.
Another significant advantage of education loan in India is that you can avail a flexible loan facility, which enables you to make multiple withdrawals against your sanctioned loan amount. Since educational institutions take their fees in instalments, generally before every semester, you will find this feature of loan against property for education particularly useful.
These are but only a few benefits of availing a loan for higher education. For the entire list, visit the website or branch of any reputed NBFC like Bajaj Finserv, which offers such advances with the most flexible repayment terms.
They also bring you pre-approved offers, which ease the loan application process significantly. Such offers are applicable on loans against property, personal loans, business loans, among a host of other financial products. These tips mentioned above can help you save quite a bit during your education loan repayment tenure. But before availing for loan always be sure that you meet the education loan eligibility criteria for instant approval. If you are a sound financial planner and take proper steps, you can pay back your debt before its scheduled time. Remember that the earlier you repay your loan balance, the less interest you pay.