It's been a long journey to say the least. The education saga that began with your first board exams in Class X, then Class XII, the long and winding graduation journey and, finally, the post-graduation. Phew! Finally, the corporate world considers you worthy of employment and offers you a job.
The world seems to be full of excitement and opportunities, until you stumble upon the fact that you are in debt! Yes, that minor detail called a 'student loan' that sponsored your education. It's time now to repay the bank, but it need not be the ordeal you think it might be.
Here's the good news: your student loan is possibly one of the cheapest and most flexible loans available. And, with the government offering tax relief on student loans, there are quite a few ways of fitting your monthly installments into your hectic job routine and career goals, rather than your life centering on repaying it. Read on to find out more:
Back to the basics:
Most education loans in India charge an interest rate of 11-12 per cent. This is a floating interest rate and is dependent on the Prime Lending Rate fixed by the RBI. Most banks offer enough of a window for students to get employed; in India, it is about 6-9 months from the date of graduation. This is called the grace period. This means the actual repayment of the loan begins only after your term of study plus six months (or, in some cases, nine months).
Text: Sachin Lele
Illustrations: Uttam Ghosh
Also read: The first step to investing
Advertisement
