Here, you can learn about the various repayment modes and how to pay off your education loan faster without breaking the bank.
Studying abroad is a life-changing decision, but it is also quite tricky. Those who want to study overseas often struggle to make the education journey debt-free. If you can relate to it, then this article will be helpful and provide the best tips and ideas for clearing the loan without straining your budget.
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Here, you can learn about the various repayment modes and how to pay off your education loan faster without breaking the bank.
How to Study Debt-Free in a Foreign Country?
One of the biggest challenges to overseas education is the high cost. However, many students hesitate to take loans because of their longer liabilities and payments. But following the right strategies and tips, it may be possible that you study debt-free in a foreign land. Then, plan well, get the help of financial assistance, choose the exchange program, and take advantage of scholarships and grants, if possible.
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Another way to pay off your loan is to earn money while studying to get a job. Instead, it is fine to do part-time jobs that require less time. Balancing your budget with less spending, try not to waste money on unusual things. These are ways to convert your dream of being debt-free into reality.
Repayment modes of education loans
Applicants can repay their education loan in various ways. Every bank accepts all modes of payment. Hence, some education loans demand specific modes of payment. A better understanding of the diverse options of education loan repayments makes it flexible for students. Here is a list of all repayment modes of education loans.
1. By Cash – All the national and international banks accept cash for student loan EMIs—students and co-applicants pay their EMIs with the help of online services or by visiting the bank. There is no extra cost charged by the bank for cash repayment.
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2. By Cheque – All the banks accept the cheque for education loans. Some banks provide cheque collection services and demand drafts, but these are not accepted by all foreign banks. Many colleges allow PDCs (post-dated-cheques) for repayments.
3. By EMI – Students can repay their education loans through automated loan EMIs, which include ECS (Electronic clearance service) or NACH (National Automated Clearing House). This is useful for those applicants who pay their education loan from a savings account at the same or different bank.
Smart Ways to Clearing Study Abroad Loan:
An education loan has many benefits; it helps you achieve your educational goals and get into a foreign institute without worrying about funds. Hence, many applicants hesitate to take loans for higher EMI payments. But by using the right strategies, you can pay it off faster.
Here are some smart ways and tips to clear a study abroad loan. Let’s look at smart strategies and tricks for paying off your education loan quickly.
1. Pay Extra Money with Instalments – Firstly, understand all the terms and conditions that apply to the repayment of the Loan. Add a small amount of money to each instalment because it is helpful to save a lot of extra money on long-term interest. It is all about how quickly you pay all the principal amount.
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2. Get a Part-Time Job – Students also try to pay the interest while doing a part-time job. This is helpful in your EMI payments and reduces the debt burden. Saving money from part-time jobs makes your loan payback process smoother and more flexible. Depending on your financial situation, you can also pay the simple interest in a lump-sum method or try to pay monthly.
3. Sort High-Interest Loans – If you have multiple loans, first sort to pay off all the loans with the highest interest rate. Remember, if you focus on this mortgage, you reduce the amount of interest and save the money for the long term. Consider allocating extra funds to higher interest-rate loans.
4. Balancing Your Budget – Careful budgeting helps clear the education loan. Saving a certain amount of money is balancing your budget. Focus on your income and expenses and spend accordingly. Every month, create a budget and estimate your expenditures, such as bills, rent, living costs, etc.
5. Less Spending – Try to cut expenses on unnecessary and unthrifty things. Always remember that saving extra money helps you repay your Loan and maintain financial freedom. Using this strategy, you can pay off your education mortgage faster and move towards a secure lifestyle and future.
6. Claim for Tax Deduction – Section 80E of the Income Tax Act allows the deduction on repayment of education loans. The amount a student can claim is based on the total interest paid in a year. Moreover, this deduction can be claimed by the applicant, parents and spouses.
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Final Words
All in all, several scholarships and grants are available that make your study abroad journey smooth and flexible. Some of them may be difficult to get, but using these strategies and tips can make your education debt-free. This is an easy way to convert your dream into reality and helpful to pay off your education loan quickly. Consider all the tips and tricks before repayment of an education loan and make it financially and mentally simple. So, follow all these smart ways to repay your education loan and ideal strategies to complete your overseas studies.
