How to Pay Educational Loan Without Interest: We all know that an education loan is very important for students who want to study higher but cannot afford to pay the fees. But along with that one common question that every student who is proceeding with education loans is can we able to pay off this education loan without interest? If yes, how to pay? But unfortunately, the answer to this question is “no.”
Education loans cannot be paid without interest. But there are some ways to reduce your interest. To know all those just checkouts the links below.
How Can You Reduce the Burden of Education Loan Interest
If you are looking for ways to reduce the education loan interest rate as it became a burden for you to repay the loan then investigate the below ways.
- Pay Interest During Moratorium Period
- Increase the EMI Volume
- Go For Collateral Loan
- Try For Scholarships
- Loan Subsidy Schemes
- Reduce Loan Tenure
- Personal Loan
Pay Interest During Moratorium Period
When a student opts for an education loan, the EMI (Equated Monthly Installments) do not start immediately after taking the loan. Student can complete their education and after securing a job they can start paying the EMIs and this period we call it a moratorium period.
By reading this you may think how it is useful for me to pay an education loan without interest. Here is the answer, by repaying all the loans that you have taken within this moratorium period then you can avoid paying a lot of interest.
As there is no prepayment charge for an education loan you can happily utilize this.
Increase the EMI Volume
If you do not want to go for the above way as you cannot able to pay you can go for this option which may be beneficial and reduce the burden of interest rate. Once after completion of your education, if you have got a high-paying and secure job, then talk to your bank or lender and increase your EMI volume.
So that you can complete the loan in less tenure and can avoid some of the interest rates.
Go For a Collateral Loan
One more effective answer to your question” How to pay an Education loan without interest rate.” Most banks ask for the collateral only if the loan is high, for small amounts they do not ask for collateral and many people think to take the loan without collateral. But if you own any land or property, take the collateral loan as the interest rate will be less compared to unsecured loans.
Also check for the article, Which Bank Has Lowest Interest Rate on Education Loan
Try for Scholarships
An interesting way to reduce the burden of education is through exploring different financing options. If you are a merit student government provides different scholarship schemes. These scholarships are available in almost every institution.
So, a student who took an education loan, if he/she gets a scholarship, can use that money to repay the loan and reduce interest.
Even have a look at the process of How to Apply for Education Loan for Abroad Studies too.
Loan Subsidy Schemes
As there is no education loan without an interest rate central and state government provides many subsidy schemes for education loan for people who are economically weaker category. If your family income is below Rs.5 lakhs or if you come under a minority or backward class then you can apply for these subsidies.
By applying for subsidies, you can reduce your interest as the interest accursed on the loan will be paid by the government of India through subsidy. And even a one-year moratorium is also paid by the government.
Reduce Loan Tenure
When we are taking an education loan, we will have two options, one is secured and the other is unsecured. Secured education loans are available for a tenure of up to 10 years, which means the loan can be paid on EMI for 10 years if the loan is up to Rs7.5 lakh and more based on the money. Whereas, unsecured education loan has a shorter tenure.
As the EMI cost reduces for a secured loan as it has more time, taking a shorter tenure will reduce the cost of interest. It will be very helpful for the people who cannot collateral.
Personal Loan
When any of the above options are not suitable for you. Then one more best thing to reduce your education loan interest is opting for Personal Loan. Because when you take a personal loan, it is very flexible to choose your duration and EMI yourself. And, when you take an education loan you cannot change the interest rate as it is fixed.
Whereas in this personal loan, you can get a lower interest rate based on a high credit score. You do not need to take co-applicants if you meet the financial eligibility requirements. And in a personal loan, you can decide the repayment structure that suits you.
FAQs On How to Pay Education Loan Without Interest
- Can I pay Education Loan at once without interest?
Yes, repaying the education loan at once without paying it month by month will reduce the interest rate that needs to be paid.
- Can students their education loans early?
Yes, the student can repay their education loans early as there are no prepayment charges after 6 months of disbursal of education loans.
- What is the best way to pay an education loan without interest?
The best way to pay education loans without interest is through loan subsidy schemes.
Key Outcomes
We hope that you may have got clarity on How to Pay Education Loan without Interest. As we have shown many ways to repay the loan with less interest as we have no such education loan that gives without interest. Choose the best way that is suitable for you.
Still, if you looking for more relevant articles like How to Get an Education Loan from the Government, How to Get Education Loan After the 12th, and many more, check out learncbse.com website.