Education Loan

Repaying Avanse Education Loans: A Comprehensive Guide

Repaying Avanse Education Loans: A Comprehensive Guide

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Read GyanDhan’s comprehensive guide on how to repay avanse loan.

GyanDhan
Ananya Ghai
Updated on:  01 Mar 2024  | Reviewed By: 
Aman 
| 183 | 5  min read

Education loans are a significant financial investment, offering the financial support necessary to pursue higher education. However, once the academic journey concludes, the focus shifts towards repayment. This comprehensive guide aims to navigate the complexities of how to repay Avanse loan, ensuring borrowers effectively manage their loans.

Understanding how to repay an Avanse loan is important for managing your finances. Avanse Financial Services has created repayment plans that are easy to follow and help you stay financially stable. In this guide, we will look at the different ways you repay your loan, like monthly payments (EMIs), paying interest while you're still studying, and using online payment methods. Before diving into the ins and outs of how to repay avanse loan, let us first understand the features of Avanse abroad education loan.

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Features of Avanse Abroad education loan 

Feature Description

Loan amount

Up to INR 75 Lakh

Rate of interest

12.5 - 13.5%

Processing fees

0.5 - 1%

Processing time

7-10 days

Margin money*

nil

Moratorium period*

Course duration + 1-year

Repayment tenure

15 years

 

Check Your Education Loan Eligibility

*Moratorium period is the time duration during which you are not required to make payments toward your education loan.

*Margin money refers to the amount of money a borrower is required to contribute towards the loan, while the lender pays the remaining amount. 

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How to Repay Avanse loan?

Repaying an Avanse education loan can be managed through various methods, ensuring flexibility and convenience for borrowers. Here are the key strategies and repayment options available:

  • list items Equated Monthly Installments (EMIs): EMIs offer a systematic approach to paying off your loan by making fixed monthly payments. This method helps in steadily reducing your loan balance by covering both interest and the principal amount.
  • list items Interest payments during the course: To lessen the financial burden post-graduation, students have the option to pay simple or partial interest during their course's moratorium period. While this grace period exempts students from paying EMIs, interest still accumulates, affecting the total loan repayment amount. Making interest payments during this time can significantly reduce the overall cost.
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What are the modes of Repayment of Avanse Education loan?

The repayment of an Avanse Education Loan can be managed through various modes, offering flexibility and convenience to borrowers. These methods include:

  • list items Equated Monthly Installments (EMIs): A structured way to repay the loan in fixed monthly payments, covering both the principal amount and interest, making it an organized approach to debt reduction.
  • list items Serving simple/partial interest during the course: An option to pay simple or partial interest during the course's moratorium period, helping to reduce the overall repayment amount as this period does not exempt accruing interest.
  • list items National Automated Clearing House (NACH): A system by the National Payments Corporation of India (NPCI) for automating monthly EMI payments directly from the borrower’s bank account, requiring a NACH mandate for authorization.
  • list items Electronic Clearance Services (ECS): Similar to NACH, ECS is used for automatic EMI deductions from the borrower’s account, with the main difference being the processing time for transaction settlement.
  • list items Cheques: Repayment can also be made by submitting cheques directly at Avanse Financial Services.  
  • list items Post-Dated Cheques (PDCs): Borrowers can provide pre-signed cheques with future dates for the clearing of EMI payments on specified dates.

Additionally, Avanse Financial Services offers digital and online repayment options for enhanced convenience. These digital methods allow for easy and hassle-free repayments, catering to the preferences and conveniences of modern borrowers.

  • list items UPI apps
  • list items Digital wallets
  • list items Easy Pay
  • list items Internet Banking
  • list items Debit Cards

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When to Start Avanse Education Loan Repayment?

It is advisable to start loan repayments as early as possible, even during the moratorium period, by making simple or partial interest payments. Despite the absence of a requirement to make full repayments during this period, making simple or partial interest payments can have significant benefits. Wondering the best ways to plan your repayment, click here and look no further.

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What are the Benefits of Early Repayment of Education Loans?

Avanse Education Loan repayments during the moratorium period are a wise financial strategy. It not only helps in reducing the total cost of the loan but also aids in cultivating a habit of financial prudence. This approach ensures that students are better positioned to manage their debts effectively and achieve financial stability sooner. Below are listed some of the benefits of repaying your education loan early.

  • list items Reduces the total interest accumulated Interest on education loans continues to accrue during the moratorium period, even if no repayments are made. By choosing to pay off the interest partially or in full during this time, the total interest that accumulates over the loan period can be substantially reduced. This approach decreases the overall financial burden on the borrower.
  • list items Decreases the loan tenure: Early payments can also lead to a reduction in the overall tenure of the loan. With a lower principal amount to be repaid after the moratorium period, borrowers can either choose to keep their EMI the same and shorten the loan period or reduce the monthly payment amount, depending on their financial situation.
  • list items Encourages financial discipline: Starting the repayment process early instills a sense of financial responsibility and discipline. Managing loan repayments effectively from the outset can help borrowers develop a good credit history, which is beneficial for any future financial endeavors, such as applying for a mortgage or another loan.
  • list items Eases the repayment burden: By initiating repayments early, students can ease the financial burden that typically comes with starting loan repayments after the moratorium period. This proactive approach allows for a smoother transition into the workforce without the immediate pressure of significant loan repayments.
  • list items Prepares for future financial obligations: Early repayment is a strategic move that prepares students for their future financial obligations. By gradually integrating loan repayments into their budget, students can better manage their finances upon entering the professional world, ensuring they are less likely to face financial strain.

 

For students seeking further assistance in navigating their education loan options or looking for personalized advice, let GyanDhan be your guide in your abroad education journey. With partnerships with leading lenders such as State Bank of India, Bank of Baroda, ICICI Bank, Axis Bank, Avanse, and HDFC-Credila we aim to provide the best loan option to aspiring students. We operate as a comprehensive ally for students embarking on their educational journeys abroad, offering end-to-end services that simplify the process of securing an education loan. From the initial step of selecting the most suitable loan provider based on the student's unique financial needs and academic goals. Check your loan eligibility to start your education loan journey!

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Frequently Asked Questions

How to repay avanse loan?

The repayment starts 12 months after the completion of the course or 6 months after getting the employment, whichever is earlier. Once the grace period is over, the borrower is required to start repaying his loan with EMIs.

What is the repayment period for the Avanse education loan?

Avanse offers a repayment tenure of over 10 years. They additionally provide a grace period of 6 months from the day you finish your course or 3 months from the day you get a job.

What happens if we fail to pay the education loan?

If you fail to do so within the repayment tenure, the lender will consider you a defaulter and can report you to the credit bureaus. Being classified as a defaulter can severely affect your credit score and limit your access to fresh credit. Avoid this by paying your loan EMIs per schedule.

Check Your Education Loan Eligibility


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