Guide to a seamless repayment of education loan for MBA graduates

The industry demand for MBA graduates is increasing and many students are taking advantage of this. The high-paying jobs and challenging roles are attracting many young minds. Students are exploring more options and are ready to go to foreign universities to complete their post-graduation and get exposed to more opportunities.

As the cost of quality education is inflating, the affordability is decreasing. Students take education loans in order to fund their education in their desired college. The education loan process could be a tedious job, so we are here today to provide you with a simple guide for a seamless repayment of your education loan.

1.) Calculate the total funding required

Before you explore options of funding sources, it is important to know the total cost of your MBA in your desired college. Besides the tuition fee, you also have to take other expenses into account. Expenses like accommodation charges, food charges, transport charges, etc. The final amount shall include all the expenses you might incur during the course of your MBA. The first step of the education loan process will require you to declare the final amount needed to complete your education.

2.)Check all the loan qualifiers

It is essential to qualify on all the parameters in the education loan process to get the loan amount disbursed. Failing to provide even a single document might lead to a rejected application. It is therefore important to know all the required documents before filing the loan application. In the case of an education loan, you need a co-signer who has a good CIBIL score. Keeping all things in mind, make sure you match up all the loan qualifiers.

3.) Choose a repayment plan that fits your pocket

Choosing the right repayment method is very crucial and will be helpful at the time of repaying. A repayment plan is essentially a roadmap with details about the amount of the installments and the tenure of the loan. This will give you an understanding of how much interest you are paying and by when your loan will be over. You can choose a plan that fits your pocket and will not burden you financially at the time of repayment. To calculate the interest on your education loan, you can use a student loan interest calculator and get a fair idea of the payment structure and choose the best education loan.

4.) Use the moratorium period wisely

The borrower is exempted from repaying the loan in the moratorium period. As a student, it will be very helpful as you can complete your studies in this period and start your installments when you have a job. Although you do not have to pay the installments during the moratorium period, the interest rate still gets accumulated during this period.

5.) Don’t forget to get tax benefits

Section 80E of the income tax act provides benefits to the students repaying their education loans. The interest paid on the loan amount can be claimed as deductions and thus you can avail of tax benefits. It is important to mention it at the time of filing the income tax.

Getting higher education should open doors to new opportunities and not bury you under the burden of loan repayment. Anyone aspiring to do an MBA in a prestigious college with the help of an education loan should be well acquainted with the education loan process and things that one should keep in mind while applying for an education loan.