When it comes to pursuing higher education abroad, taking an education loan is the most sought-after funding option to meet the financial requirements to complete the course. Since foreign education requires a whopping sum of money to fulfil all the higher education-related expenses, education loans are a viable way to fill the gaps in finances. Furthermore, other options to fund and reduce education costs are scholarships, research grants, and academic awards.
As education loans are intended to cover the cost of tuition, living expenses, books and supplies, most people prefer education loans over self-finance. There are many banks and financial institutions that offer education loans at competitive rates.
Taking an unsecured or secured overseas education loan brings you into student debt. Debt from your college days seems overwhelming, but there are several ways to lower your student debt. So, here’s an article that will focus on reducing your student loan debt in the best way possible. Read on to know the tired and tested strategies to reduce student loan debt and lessen your burden of loan repayment.
Tried and Tested Strategies to Reduce Student Loan Debt
1. Pick and Choose an Education Loan
Make sure you choose an education loan among the several types of loans. Getting another type of loan for education is of no use as every type of loan has certain restrictions. The rate of interest for education loans is comparatively lower than for personal loans. So, choosing the right type of loan will help in reducing your student debt.
2. Apply For Scholarships
The next strategy to lower your student debt is to apply for scholarships. There is a plethora of scholarship opportunities available for international students. Some of these scholarships are fully funded, while some are partially funded, so apply for these scholarships and reduce your cost of education.
3. Pay More Than Your EMI
EMI is a fixed amount of money you must pay during the loan repayment tenure. If you pay more than the minimum EMI, you can accelerate your payback timeline. With time, paying more than the EMI will cut down on your loan tenure and loan amount significantly.
4. Work Part- Time
Another way to reduce the amount of the loan and pay back the money on time is by working part-time. Having a part-time job will help you bear the expenses of living and as a result, you won’t need to borrow from your sanctioned loan amount.
5. Improve Academic Performance
Many leading universities in the world provide grants and scholarship awards to students who are performing exceptionally well in their academics. So, to reduce your student debt, you should improve your academic performance and qualify for such grants and awards.
6. Take the Benefits of Tax Deductions
Under Section 80E of the Income Tax Act of 1961, a percentage of tax deduction is allowed on the total interest amount of the EMI paid during the financial year. You can take benefit of this tax deduction and reduce your student debt.
7. Pay Off Interest During the Moratorium Period
While many lenders give the option to pay serving simple interest or partial interest during the moratorium period, you must take this option and pay off your incurred interest every month so that your student loan debt decreases when the EMIs start. Paying off interest during the moratorium period will significantly reduce your student loan debt.
8. Schedule Automatic Payment
One of the easiest ways to lower your student loan debt is by using the auto-pay feature of loan repayment. This feature automatically withdraws your student loan payment from your account on a specific date. Many financial lenders also provide an interest rate discount for monthly automatic payments. The auto-pay feature will diminish the possibility of missed EMIs and as a result, you will also save on the fine for missed payments.
9. Consider Loan Refinancing
Education loan refinancing means transferring the loan from one bank to another. So if you want to change your collateral free education loan for abroad studies to a collateral loan, you can consider loan refinancing. This feature can be a great way to reduce student loan debt. Loan refinancing is generally done to get a lower rate of interest on your existing loan amount. However, the process of loan refinancing might become difficult if you have a complicated financial profile.
10. Seek Employer Assistance
Some companies and employers offer benefits packages that include student loan repayment. So depending on the company, your employer might provide added incentives to pay off your student loan debt. Ensure that you check with your employer and seek this assistance to reduce your student loan debt.
Following these tried and tested strategies will inevitably reduce your student loan debt and further reduce your cost of studying abroad.
To Simplify the Process of Education Loans, you can reach out to expert financial advisors at ÉLAN Overseas Education Loans. The experienced education loan advisors will streamline the entire loan application process for your overseas education and help you in selecting the right financial institution.
So if you need an education loan for abroad studies without collateral or with collateral, you are at the right place. ÉLAN Overseas Education Loans’ step-by-step application guidance will make your loan application process effortless and simple. The best part of seeking loan assistance from ÉLAN is that we don’t charge any service fees from you. So, grab the benefits of easy loan sanction by reaching out to ÉLAN Overseas Education Loans.