Best Plan to pay off the Students Loan

1.   Monymaya - Personal Financial Planning  A/3, J1/14, KHIRKI EXTN,   MALVIYA NAGAR, NEW DELHI  110017   -7982367598  How can I paying off my Student’s Loan  easily?  May 16, 2017  If I talk about the best strategy for                 paying off Student’s Loan, then I             would say this. At the first place, do                 not to go for any Loan for your higher                   studies, if at all possible then only,               else,   offcourse,   study   is   more   important.   Now, you need to apply for Student’s loan for your studies in India or abroad. Then make sure,                                     you opt a bank which doesn’t charge you more than the industry trends. Such banks are PSU                                   bank, like State Bank of India, Central Bank of India, etc.  You may also read: ​SBI Student Loan Scheme  And, ​Education Loan from Central bank of India  Other than PSU Banks, you always have an option to apply for education loan to private banks                                   like HDFC, ICICI, etc. Though you definitely would get better services from these banks, but,                               beware of their high charges for the services. So, before you decide to opt any bank, you may                                     like to do some research about the facilities, charges, Rate of Interest and repayment terms.  May be useful for you : ​HDFC Education Loan for Indian Education  And, ​HDFC Education Loan for Foreign Education   

2.   Best Plan to pay off the Student’s Loan:  Student’s loan repayments typically consist of both interest and a principal. The best plan for                               paying off Student’s Loan is ​by paying the interest from month 1 that is the month next to the one when you got the loan sanctioned. Because, during the ​Moratorium period​, the interest which is applied on your principal amount is simple interest. Therefore, this amount of interest is                                                                                                   always lower and better to pay off on monthly basis.  If you keep paying the interest on monthly basis, then, when your repayment starts, you are left                                   with the principal amount         only.   This   principal   amount never becomes a         burden for you, and it’ll           also save you money in           the long run, since you           won’t   pay as much in         interest, hence, its really         easy for you to pay off             your Education Loan.         

3.   If you are planning not to pay off your Student’s Loan, beware. Let me warn you, it would                                     definitely impact your ​Credit-ability​. Repayment behavior on Education loans is reported to the credit reporting agencies. So if you make your payments as required by the due date, you will                                                             build a good ​credit history​. If you make your payments late, or skip payments, you will build a bad credit history.                                      Advantages of Repayment the Loan on Time:  There are two advantages, however, to             paying off your Education Loan faster,             although they’re not just on your ​credit score​. You’ll improve your debt-to-income                         ratio, which is something banks check             before making a big loan like a Mortgage                 or​ ​Home Loan​.  Ohh…I forgot to mention, If you repay your                 Education Loan timely then, you are             eligible for a Tax rebate for the interest you pay on an education loan under ​Section 80(E) of the Income Tax Act 1961. Your parents can claim a deduction when they take a loan for your                                                                                

4.   education or you can claim a deduction when you take a loan for your own, your spouse’s or                                     your children’s education.  Since the period of deduction is limited to 8 years and there is no cap on the amount of                                       deduction, it is prudent to wrap up your loan in 8 years and claim as much interest as possible,                                       of course, when you are able to afford the outgo. Note that, the law does not specify whether                                     this higher education has to be undertaken in India or outside India.  Recommended Read: ​Central Sector Scheme of Scholarship for College and University Students  GOLDEN RULE:  There is a Golden rule about             Loans. Either you don’t borrow           any loan, or if you do, then do not                   try to skip the repayment of the               same.   Because,   Skipping   the   repayments   will definitely ruin       your future Credit-ability. And, to           be really honest, you never know, when your​ ​Credit-ability​ would become you