If studying abroad is a dream, then availing a study abroad loan is one of the primary approaches for funding. The challenge arises when you need to start fulfilling that education loan. Achieving financial freedom and living a debt-free life is what every student aspires. Paying off the debt as early as possible can free up the earned income which can be further utilized to invest wisely for the timely attainment of financial goals.
Another major reason to pay off Education Loan for abroad studies in the stipulated time is to retain a respectable credit score. You will the 5 most effective and tested ways to clear off your education loan.
- Pay the Interest During the Course Duration
Every bank or finance organization has its own policies for rate of interest which are applicable on the loan amount. These are simple interest rates and the compounding of this interest increases the financial burden when actual loan repayment begins after your grace period is over. Hence, it’s always better to choose a lender that offers a lower interest rate. It is really important to wisely choose the overseas education financer. Some Financial Institutions give an option to pay loan interest amount upfront and in one go. This facility is provided depending on the nature of course and underlying demographics. These kinds of financial organisations are to be approached.
- Smooth Planning of Finances
During the tenure of the course, spend wisely. Use a suitable Insurance Policy to cover the medical bills. Look out for some part-time work, which helps to put aside a certain amount of money on a regular basis. It doesn’t matter how small the amount is. Small amounts put together in a systematic manner amount to larger amounts in the future which can be utilised to pay student loan EMIs.
- Earn While You Learn:
Students should consider taking part-time jobs to bear the day to day expenses. This can help to repay a large chunk of money through instalments or through a single stroke. There are some lenders that do not charge for repayment or charge less. So, again it all depends on choosing the right lender. Nowadays, repayment of student loan debt or providing assistance for student loan debt is the new employee benefit incentive which is becoming very popular as companies find this to be a good way to retain the right talent.
- A Little Excess Interest Every Month Will Add To Big Profit
This is another great way of paying the study abroad Loan debt early. Also, there is a special provision given to students before they start repaying their education loan. Now this is in the case of both secured and unsecured overseas education loan. The moratorium period or EMI holiday period allows the student or parent to pay the simple interest applicable for loan only during this period. The completion of 1 year after finishing the course or 6 months after getting the job from the time the loan is transferred to the student’s account is the stipulated Moratorium Period. Then the regular decided EMI value has to be paid by the student every month. This can be definitely beneficial in the long run of repayment.
- Opt for Some Good Investments
This could be a creative way to pay off the higher education loan debt only after the student gets a job. Or if the student has some additional funds. The whole idea is to invest some money for a longer time frame. One of the great ways to do that is to choose a good Mutual Fund or alternatively invest the money in a Fixed Deposit which offers a fixed yearly return. Using this technique, the loan debt can be paid off by with the returns or interest earned from the investments. This way money keeps multiplying eventually easing out the burden of the entire loan amount.
Contact the nearest overseas education consultants to get complete guidance on education loan for study abroad which now you know will not be overburdening.
Take the right steps today to live debt-free and stress-free tomorrow.
Akorede Adetunji said on December 3, 2020
These tips are real helpful.They sure include the basic things to bear in mind and to do in order to payoff study abroad loans without stress or any financial strain.
They also are very applicable and useful in other real life situations too as it applies to everyone in that facet.