While industry experts express their doubt if RBI would introduce schemes in favour of education loans in India by extending the moratorium period, like it did when the pandemic first hit us, there is still no need to panic. Planning at this stage is critical not only because of the pandemic-led financial issues but also because it is essential to maintain a healthy credit score early in your life. Here, we bring you important tips to ease your worries related to Equated Monthly Instalments (EMIs) of your student loan amid the pandemic.
Identify your expenses and then break them into need-based and want-based expenses. Your expenses related to food, rent, monthly bills are essential, and hence, make a provision for them in your monthly budget. On the other hand, those latest gadgets, expensive mobile phones, smartwatches, and other such expenses that dig a hole in your pocket, can certainly wait. As you have worked out your new budget, the task is half done and now follow it stringently to complete the other half of the task.
Working while you are studying helps you achieve two things with one deed. During these troubled times, it will help you earn income that will prove to be nothing short of a boon. And this experience will eliminate all the roadblocks when you first apply for a job after your education. Portfolios with experience will outweigh those without any experience.
While this is obvious, we often end up taking more loans either because of some situation or because we want to pay off the current loan. But avoid taking other loans to pay off the current loan and instead plan your budget as mentioned earlier. And other financial obligations like car loans which add to your expenses like maintenance cost, servicing cost, fuel expenses, etc. are best avoided completely for a certain period.
Credit cards make you feel empowered because you can make payments even if you do not have enough balance in your account but eventually it costs you anyway. What later add to your woes are the other expenses like interest rates, late payment fees, annual charges, hidden costs and other such charges associated with your credit card. It is easy to lose a track of expenditure with a credit card and sometimes you might even end up buying unnecessary things. This is where other plastic money will get you through the crisis- a Debit card! A debit card gives you a realistic view of your financial account and helps make better choices each time you make a purchase. This does not mean that you can’t have a credit card at all. You just need to spend judiciously.
Tools like Education Loan EMI Calculator will help you in the planning process before you take a loan. These tools will give you clarity about aspects like the amount of EMIs, tenure and more.
The calculators will certainly shed light on many factors like amount, tenure, etc., giving you a general view of the repayment of the loan. However, we recommend getting in touch with the lender. Please feel free to talk to our expert team at Avanse who can guide you through various queries related to the new loans or existing loans.
After evaluating your finances with tools like the calculators coupled with the sound advice from team Avanse, you can form your repayment strategy. You have to work out the strategy that works best for you. You may decide to reduce the tenure, increase the tenure and change the EMI amount accordingly. The goal is to consistently pay the EMIs, so that it does not negatively impact your credit score, so plan accordingly.
The education sector is continuously evolving to accommodate the challenges arising from the global pandemic. And the best part is, this pandemic hasn’t stopped ambitious students like you from achieving your academic goals. To support you like a true partner, we have brought these tips to help you make wise decisions during these troubled times. We hope that these tips help you emerge out of this crisis and assist you to pay off your EMIs regularly.
We always aim to offer you competitive interest rates on your Avanse Education loan.
The rate of interest on your loan is calculated as: Interest Rate = Avanse Base Rate + Spread.
Our current Base Rate is 14.25% (WEF 01.05.2023).
The Spread is floating and is based on analysis of overall credit and course profiling.
This rate is subject to the terms and conditions of Avanse Financial Services Ltd.