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Education Loans for USA

Updated on Nov 15, 2022

For all types of student loans, repayment is typically made in equivalent monthly installments (EMIs) over a 15-year term. The repayment period starts after the course ends, plus one year. The repayment period usually starts after the end of the course or six months after. The margin offered for loans is 15% if the loan amount exceeds Rs. 4 lakh.

You should consider how to repay the loan before taking it out. Students must read the banking regulations regarding student loans and basic financial planning to reap the benefits of timely repayment.

With all of India's major school loan providers, students can manage their loan repayments in various ways. When it comes to repaying a student loan, there are three main aspects to consider:

Table of Contents

1 Things to consider

  • Calculating education loan repayment: comparing the cost of each EMI to the total number of EMIs to be paid

  • Repayment options for student loans include: How to repay a debt, when to repay it, and how much to refund?

  • Management of student loans: Tips & techniques for making the most of the loan scheme's features

An essential thing applicants must consider before taking an education loan is calculating the EMI. To complete these calculations, applicants must have accurate information on school loan interest rates and administrative expenditures. It will help you understand the following.

  • How many EMIs can you afford to repay your student debt completely?

  • What should be the EMI for the timely repayment of a student loan?

  • How long would it take to repay the student loan in months or years?

The Indian Banking Association (IBA) governs India's banking institutions and offers candidates education loan estimating services. To use this student loan repayment calculator, follow these steps:

  • Visit the Indian Banking Association's official website (

  • Click on 'Calculators' from the homepage's menu under the 'Others' tab.

  • To find out how much you'll have to pay in EMIs for your student loans, go to 'How much do I have to pay?'

  • Click on 'How long will it take to repay' to determine the tenure of the EMI repayments.

Students might increase their EMI to pay less interest and repay their college loans sooner than expected. Alternatively, they can prolong the study loan tenure (length) to suit the EMIs within their budgetary constraints.

2 Repayment Options for Student Loans

Now that you know how many EMIs will be required to repay your education loan, it's critical to understand the various payment options available. Students sometimes overlook early payment options. As a result, they're stuck with an extended repayment time and exorbitant interest rates. The following is a comprehensive overview of all student loan repayment options -

EMIs on student loans

EMI is the most popular way to keep your school loan repayments organized and self-directed (easy monthly installment). EMIs are a set amount of money determined at the time of loan application that students can pay each month to repay their study loan in installments. The EMI is a sum that includes the amount of student loan interest and a percentage of the loan principal.

EMI = (Annual interest on loan amount disbursed)/12 + principal loan amount component

Every month, the EMI component of the original loan amount is deducted from your borrowed amount, which is how you return your entire education loan. The loan's interest rate component remains constant. Therefore the higher the EMI, the larger the component of the principal amount and the faster you pay off the loan.

Part-payment of a student loan

In addition to the EMIs, students might pay a lump-sum amount at regular intervals to repay their study loan. Applicants can repay their student loan a little earlier and minimize their overall interest payment in this way.

Pre-payment or foreclosure

Pre-payment or foreclosure of an education loan is an option for students who can repay the loan in one go. Almost all banks are now required to provide this service due to recent changes in banking regulations, but some still charge a processing fee. Even so, paying off a student loan altogether is preferable to paying it off slowly.

3 FAQs

Question 1: What are the different modes of repayment?

Answer: Applicants can return their study loans in various ways, and every bank accepts them. Some loans, such as school loans for study abroad, have strict payment requirements. A better understanding of student loan repayment options makes it easier for applicants. Here are some loan repayment options:

  • Repay Education Loan by Cheque/DD (Demand Draft repayment)

  • Education loan repayment by cash

  • Automated EMI payments (ECS/NACH) of student loans

Question 2: What are some repayment tips?

Answer: Some repayment tips are as follows -

  • Planning crucial for Education loan repayment 

  • Make a small extra payment with each installment.

  • While you're studying, get a part-time job. 

  • It's better to automate your payments.

  • It's a good idea to pay off variable-rate loans initially.

  • Take financial help from your employer if possible.

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