A Guide on Best Loan Repayment Strategies

Posted In education loan On May 15, 2019
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Student loans can be a big help for underprivileged students to finance their higher education. But paying off your student loan after you graduate can be a burden at times since you have to pay off a decent chunk of EMI every month. Especially for a student, paying off the debt right after college can be hard. Thus it's advisable to calculate your monthly EMIs before taking a loan, making sure you can repay them conveniently.


This is where you’re thinking, ‘How to pay off student loans early?’

Well, this article highlights some of the key strategies that will help you pay off your student loan. Student loans can be a hassle while paying off the huge chunk of EMIs every month. Especially for a student, paying off the debt right after college can be hard.


Here are some of the best loan repayment strategies you can opt for -


  1. Make two payments in a single month.

Making two payments in a month can help you in paying off your student loans early and save a lot on interest in the end.


  1. Pay more than your minimum EMIs

If you start earning right after your college, you can start paying more on your EMIs which will eventually help you save a lot on interest in the end.

  1. Use debt calculators and budget planners to manage your finances better

Make use of debt calculators and budget planners to handle your finances such that all the EMIs are paid on time and you don't have to pay any fee for late payments.


  1. Make use of side hustle.

Make use of internships and other opportunities to save some extra money. You can also opt for graduate assistantships in your college which can also get you more financial support.


  1. Use the debt snowball method.

The debt snowball method is a smarter way to manage all your finances. It basically starts with arranging all your loans into ascending order. The smallest balance is put on the top while making minimum payments on the rest of the loans. As a result, all the extra money can be added to the smallest balance. As such all the small loans wither away and you will be left with fewer loans over time.


     6. Take advantage of the Income Tax deduction and Interest subsidy scheme.

Under Sec 80E of the Income Tax Act, Credit borrowers can profit tax reductions on interest paid on their educational loan. This benefit is accessible over and above the Rs. 150,000 deduction permitted under Section 80C. You can avail the tax deduction once the applicant begins paying the interest on the education loan. The principal amount doesn't qualify for tax exemption while the deduction is available for 8 years or until the payment of interest in full, whichever is earlier.

How you can optimise your repayment plans with Credenc?


Credenc is partnered with multiple banks and colleges to funnel more financial assistance more conveniently thus making it more accessible to students. As such, a student can take in consideration of several student loan plans from multiple banks and select the one that suits his/her need. Going beyond the traditional norms of loan structuring, Credenc ensures fast processing, alternate credit-scoring models for meritious students.

While repaying the loan, Credenc also helps you in keeping track of your loan via customer support and loan counselling. So get started with your loan application now.   


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