Top Tips to Make the Most of Your Abroad Education Loan
This article offers key ideas to help you make the most of funding sources so you can focus on gaining experiences that will serve you for life.
8 Strategies to Optimise Your International Studies Funding
Seeking an international degree is a major investment, so strategising your overseas education loans with these 8 tips can help maximise returns and elevate the value you derive from your global learning funding.1. Understand Your Loan Terms
The key is to use your abroad education loan wisely—understand the terms thoroughly, borrow prudently, choose reliable lenders, and repay smartly.- Know the interest rate: This impacts your repayment burden. Compare rates across lenders to find the most competitive option.
- Confirm the repayment structure: What tenure do you have to repay the loan? Longer durations allow affordable EMIs but increased interest.
- Note the moratorium period: Most lenders offer a grace period after course completion before repayments begin. This allows you time to find employment.
Furthermore, ensure you are mindful of any additional or hidden charges. To avoid surprises later.
2. Borrow What you Need
Next, calculate your expenses accurately and borrow only what you need. This will prevent over-borrowing and future financial strain.- Account for tuition fees, hostel costs, travel, and living expenses in your budget.
- Additionally, factor in emergency buffers and inflation spikes for realistic estimates.
- Reduce loan dependency by applying for scholarships and education discounts and using personal savings.
Correct estimates allow you only to borrow necessary amounts, saving on interest.
3. Choose the Right Lender
Not all lenders are equal—research multiple providers to pick the ideal one for your situation.- Compare interest rates, moratorium periods and overall flexibility across lenders.
- Additionally, check for student benefits like forex services, insurance coverage and guidance services for better support.
- Avoid lenders with unclear processes, hidden charges, or inflexible terms that can cause trouble later.
4. Use an EMI Calculator
Online education loan EMI calculator are your friends. Use them to align your repayments to your future income.- Input loan amount, interest and tenure to forecast the EMI you must pay.
- Next, factor in your expected starting salary and revise loan terms to create easily serviceable EMIs if needed.
This allows you to balance loan repayment with living costs after your studies.
5. Utilise the Moratorium Period
Moratorium periods offer much-needed breathing room once you finish your course. Use this grace period strategically.- Dedicate time to job applications and interviews rather than repayment worries.
- Simultaneously, start budgeting and building repayment funds to manage once the moratorium ends quickly.
- Avoid overspending or delaying financial planning during this time.
Careful preparation eases the post-course transition into loan repayment.
6. Leverage Tax Benefits
Did you know education loans come with tax benefits?Under Section 80E of the Income Tax Act, you can claim tax exemptions on repayment interest.
- Maintain records of interest paid towards your education loan each financial year.
- Claim deductions when filing returns to reduce your overall tax liability.
- Minimise repayment interest where possible to maximise benefits.
The savings from tax deductions provide further financial relief.
7. Stay Budget-Conscious
Budgeting is critical during your overseas education tenure to avoid overspending.- Track your monthly expenditure on food, travel, accommodation and entertainment.
- Stick to a spending limit aligned with your student income and savings.
- Avoid unnecessary purchases or overindulgence and channel funds towards repayment reserves.
8. Repay Strategically
Once repayments begin, employ strategic methods for faster freedom from debts:- Opt for shorter loan tenures even if EMIs are higher to minimise total interest payouts.
- Alternatively, start prepaying or make lump sum payments when possible to repay faster.
- Avoid missing or delaying payments to prevent additional interest or credit score impacts.