Study Abroad Loan with Moratorium: How to Plan Repayment While Still Studying
Study Abroad Loan with Moratorium: How to Plan Repayment While Still Studying
Blog Article
Pursuing higher education abroad is a dream for many students, but financing it can be challenging. Thankfully, an education loan to study abroad can ease this financial burden. One feature that stands out is the moratorium period, which gives students time to complete their course before starting repayment. However, smart planning can ensure you’re financially prepared even while studying.
What is a Moratorium Period?
A moratorium is a grace period offered with a study abroad loan during which students are not required to make EMI payments. Usually, this period lasts until the course ends plus an additional 6–12 months, depending on the lender.
Though repayment isn’t mandatory during the moratorium, interest on the education loan for overseas studies usually accrues during this time. Hence, early planning is crucial.
Why Plan Repayment During the Moratorium?
Even if you're not earning yet, there are key advantages to planning your abroad education loan repayment early:
Reduced Financial Pressure Post-Graduation: Starting partial repayments can lower the total interest burden.
Improved Credit Score: Timely payments help establish a healthy credit profile, beneficial for future loans or credit cards.
Smart Repayment Strategies While Studying
1. Pay Simple Interest Monthly
If your loan provider allows, begin paying the simple interest during the moratorium period. Even small monthly payments can significantly reduce the final amount payable.
2. Opt for Part-Payment Plans
Some banks let you pay in installments while studying. Choose a flexible education loan to study abroad that supports this to ease future financial stress.
3. Start Freelancing or Work Part-Time
Utilize the spare time to take up part-time jobs or internships. The extra income can go toward paying off interest on your education loan for overseas studies.
4. Track Spending and Budget
Budgeting while studying abroad can help you identify opportunities to save. Use these savings to make early repayments on your study abroad loan.
Key Points to Discuss with Your Lender
When applying for an abroad education loan, be sure to ask:
How long is the moratorium period?
Will interest accrue during this time?
Are there penalties for early repayment?
What are the partial payment options while studying?
Conclusion
A study abroad loan with a moratorium offers breathing space, but planning repayment early can save you from long-term financial pressure. Whether you're taking an education loan to study abroad or an education loan for overseas studies, being proactive can make a big difference.
Make the most of your abroad education loan by using the moratorium wisely. Start small, stay consistent, and step into your future debt-free and confident.
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