5 tips to make repayment of your educational loans easier

Educational loans help students study at their dream educational institutions. And thus earn a good job that pays them handsomely. Once they complete their education and start earning, they are supposed to repay their education loans. Some students find this repayment a tough obstacle to tide over and hence, look for tactics to make the repayment process easier. In this article, we will tell you how you can leverage 5 factors to make your education loan repayment easy.

Select a course which has a good job-scope

Your potential of getting a job depends on the demand for professionals of your course in the market. If your chosen course has high demand in your region then you can get a good job after completing that course. Understand that students like you who take educational loans to study the course of their choice then, first, know more about that course in terms of job opportunities and career growth prospects. Select a course that has good job scope.

Check if the mean potential salary of the course is good

Once you have selected a course to study, view the salary statistics of that course. In that, find out the mean or average salary a fresh professional gets after completing the course. Do not take into the account the highest salary that a student got after completing the course. Consider the mean salary only. Once you know the mean value, you can calculate whether you would be able to pay back the loan within a suitable tenure.

Repay the interest levied on the principal amount during course period

The interest clock starts ticking as soon as the education loan amount is disbursed. So while you are studying the course, the interest is levied continuously on your loan. To ease the burden of repayment, students like you should clear off the interest levied on their educational loans during the course period itself.

Make good use of moratorium period

A student is given a grace period—moratorium period—after he or she completes studying his or her course. Usually, the moratorium period lasts until 1 year from the time the student completes the course or until 6 months from the time the student gets their first job, whichever comes earlier. Use this grace period to search for a job. A stable and strong source of income will effectively help you tow the EMIs of your study loan.

Refinance the loan

If you find the repayment of your education loan cumbersome or difficult, then you can change the lender. You can transfer the loan from your current lender to a new lender. It is called education loan refinancing. But before refinancing, check the interest rate the new lender offers. It should be lesser than that of your current lender. Doing this will reduce your repayment burden. But do remember that when you refinance your education loan you have to pay charges like prepayment penalty, service charges, processing charges, and so on to the lenders.

So, these are the 5 factors students like you should use to their benefit while repaying their educational loans. Please consult a financial advisor before financing your higher education. We wish you all the best!