Education plans are structured differently when compared to other types of loans available in the market. To benefit the student who takes the loan, the government has offered holiday period to relieve the students from the pressure of handling the loan while they are studying. Though the students are at good intentions while taking the loan, few unavoidable circumstances many push the students to a difficult situation while repaying the education loan. In the case of the student loan, the banks the students to start repaying the loan either after 6 months of getting the job or after one year of completing the education. In the case, you face difficulty in repaying the loan; you should inform your financial situation to the bank and sort out many other options to handle the education loan effectively.
Handle Education Loan Effectively
Increase the tenure of education loan
Financial situations of the person are entirely different while availing the education loan and repaying it. The borrower may choose to go with the short tenure while availing the study loan with the aim to earn better and repay it in no period of time. Situations may turn upside down and hamper your expectations. When you have large medical bills occupying the monthly budget, you may find it difficult to repay the loan even after earning good. In such cases, you can explain the bank about your financial situation and ask them to increase the loan tenure to keep your EMI short.
Extend moratorium period:
Though the extending the moratorium period of the education loan is very rare, you should not give up anything until you give a try. You will have chances of request approval from the bank when you have good credit score apart from the negotiation skills. The request for an extension of moratorium period is approved if you convince the banker about the genuine reason for not getting the job. Alternatively, the banks may consider your request if you are looking for higher studies further and avail a top up loan. The bank may consider extending moratorium period for a period of 6 months to one year. As you will be serving during the holiday period, the interest outgo will be high when you choose to go for increasing holiday period.
The income-linked repayment plan is another good option one should consider managing the repayment of the loan effectively. You can request the banks to offer income-linked repayment plan, where you can reduce the EMI of the loan during the initial days of your career and you can increase it as your income levels raise from time to time. This option not only reduces the burden of repaying the high EMIs in the early stages of the career but also help you manage the money effectively.