Can you Cancel your Student Loan, Before or After Disbursement?

Yes, a student loan can be cancelled. But you need to be well versed with the terms and conditions to abide by for cancelling the Education Loan.

Along with the fulfilment of some requirements, you also have to provide some certain proof to meet those specific requirements. When a loan cancellation request is made, you are asking the lender to cancel the portion of debt you still owe. If the lender agrees to cancel or write off the loan, you are released from all liabilities, though you still have to pay taxes on the cancelled debt.

If a loan is to be cancelled before its disbursement, you can write an email or visit the bank stating reasons as of to why you want to get the loan cancelled. The bank will then reverse the process of sanctioning the loan.

While if the loan is to be cancelled after its disbursement, then it may be cancelled under certain circumstances like:

1. Dropout from college- In case the borrower wants to drop out from the course for which he/she has taken a loan from the college, the bank accepts to cancel the loan.

2. Cancellation due to death- All loans gets cancelled it the borrower dies before the debt is fully paid.

In all the above circumstances as well as any other reason (if any) after the loan cancellation you need to pay the debts if remaining within the stipulated period set by the bank. Some banks also charge some cancellation fees if a loan is cancelled in between the tenure. Discuss all possible cases with the lender before applying for a loan.