How to reduce your education loan interest rates.

Any student would want to lower Education loan interest rates. However, the question is, how do you enjoy such a benefit without compromising on the quality of the student loan? Well, this article will tell you how to do exactly that, read on to find out.

1. Offer a down payment.

With many lenders, a down payment is a must. For example, most public sector banks will only provide part-financing, leaving you to cover some amount of the cost. However, there are many non-banking finance companies that offer loans without asking you to provide any down payment. With such lenders, offering to provide a down payment could fetch you lower rates.

2. Providing security.

Again, many banks still require students to provide collateral, especially if you need a loan that exceeds Rs. 7.5 lakh. And again, non-banking finance companies have tried to make things easier but dropping the need for collateral. However, you should be able to negotiate a lowered rate if you choose to borrow from such an NBFC and provide security even they do not require you to do so.

3. Standout academic performance.

You could get lowered Education loan interest rates if you’ve been securing excellent marks through your schooling and college life. You can also get lower rates if you manage to excel in your entrance exams. If not lower interest rates, you should manage to get your processing fees waived off.

4. Refinance.

Just because you’ve borrowed a loan at high education loan interest rates does not mean you have to endure them for the entire repayment tenure. No, you can opt for a process known as refinancing. Under this process, one can transfer their outstanding balance from one lender to another. This is done especially if you find another lender providing lowered interest rates. It’s as easy as 1-2-3 and it is a very common thing to do. Just make sure that, if there are any charges involved, that they do not exceed the savings of a lowered interest rate.

5. Prepayment.

You can also choose to prepay your education loan. This won’t reduce the interest rates but will have the same effect of a lower rate. How? Well, there are two things that influence the interest you have to pay – the rate and the amount it is calculated on. Therefore, though prepayments do not have anything to do with the rates, they will reduce the outstanding loan amount, thereby resulting in a lower interest amount. It will also get you out of debt quicker! So when you get a job and you get a salary hike or bonuses, remember to direct those payments toward your education loan.

We hope these pointers help you reduce the cost of your education loan. Remember to compare your options before you finalize on a loan or lenders. You can also use calculators to ensure you make the right borrowing decisions and are better prepared to handle your loan.

We hope this has been helpful, good luck and all the best!

Working for education and educational loans. Students those interested in studies we help them to make their future bright students.