5 Smart Ways to Avoid Education Loan Debts

If studying abroad is a dream, then availing an overseas education loan is one of the primary approaches for study abroad funds. But again, fulfilling that education loan becomes a challenge. Achieving financial freedom and living a debt-free life is what every student aspires. Paying off the debt as early as possible can free up the earned income which can be further utilized to invest wisely for the timely attainment of financial goals.

Another major reason to pay off Foreign Education Loan debt in the stipulated time is to retain a respectable credit score.

Note the below 5 smart ways to avoid debts of overseas education loan.

Pay Off the Education Loan Interest Amount During the Tenure of the Course
Every bank or finance organization has its own policies for education loan rate of interest which are applicable on the loan amount. These are simple interest rates and the compounding of this interest increases the financial burden when actual loan repayment begins after your grace period is over. Hence, it's always better to choose a lender that offers a lower interest rate. It is really important to wisely choose the overseas education financer. Some Financial Institutions give an option to pay loan interest amount upfront and in one go. This facility is provided depending on the nature of course and underlying demographics. These kinds of financial organisations are to be approached.

Create a Sound Financial Plan
During the tenure of the course, spend wisely. Use a suitable Insurance Policy to cover the medical bills. Look out for some part-time work, which helps to put aside a certain amount of money on a regular basis. It doesn't matter how small the amount is. Small amounts put together in a systematic manner amount to larger amounts in the future which can be utilised to pay student loan EMIs.

Earn while you learn:

Students should consider taking part-time jobs to bear the day to day expenses. This can help to repay a large chunk of money through instalments or through a single stroke. There are some lenders that do not charge for repayment or charge less. So, again it all depends on choosing the right lender. A lot of companies abroad offer repayment of loan for higher education abroad as an employee benefit. Nowadays, repayment of student loan debt or providing assistance for student loan debt is the new employee benefit incentive which is becoming very popular as companies find this to be a good way to retain the right talent.

Pay more than the Minimum Loan Amount Every Month
This is another great way of paying the study abroad Loan debt early. Also, there is a special provision given to students before they start repaying their education loan. The moratorium period or EMI holiday period allows the student or parent to pay the simple interest applicable for loan only during this period. The moratorium period begins from the time the loan is transferred to the student's account till the completion of 1 year after finishing the course or 6 months after getting the job. Then the student should start repaying the loan with regular decided EMI value every month. One can look for Overseas Education Loan EMI Calculator, this can be definitely beneficial in the long run of repayment.

Opt for Some Good Investments
This could be a creative way to pay off the higher education loan debt only after the student gets a job. Or if the student has some additional funds. The whole idea is to invest some money for a longer time frame. One of the great ways to do that is to choose a good Mutual Fund or alternatively invest the money in a Fixed Deposit which offers a fixed yearly return. Using this technique, the loan debt can be paid off by with the returns or interest earned from the investments. This way money keeps multiplying eventually easing out the burden of the entire loan amount.

Contact the nearest overseas education consultants to get complete guidance about how to get education loan for study abroad which is not overburdening.