Education Loan

How to Repay SBI Education Loan?

How to Repay SBI Education Loan?

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Learn how to repay SBI education loan with ease. Know ways to repay your SBI education loan and the benefits of prepayment.

GyanDhan
Ananya Ghai
Updated on:  19 Feb 2024  | Reviewed By: 
Aman 
| 110 | 7  min read

The journey towards higher education marks a crucial phase that demands substantial financial planning and investment. Acknowledging the crucial impact of education in nurturing personal growth and progress, the State Bank of India (SBI) offers extensive education loan services to prospective students. An SBI Education Loan offers a gateway to higher education, but it's the repayment phase that often poses challenges for many. Understanding how to repay SBI education loan effectively is crucial for financial planning and maintaining a good credit score.

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Key Features of SBI Education Loan

Feature Description

Loan amount

INR 7.5 Lakh - INR 1.5 Cr

Rate of interest

Men: 10.65 - 11.15
Women: 10.65 - 10.15 

Processing fees

INR 10,000 + GST (Non-refundable)

Margin money*

INR 7.5 Lakh-INR 20 Lakh - 15%

INR 20 Lakh - 10%

Property evaluation charges

Approximately INR 7,500
(Note - property evaluation charges are subject to change, they may vary depending on one’s location and property)

Moratorium period*

Course duration + 6 months

Repayment tenure

15 years

 

Check Your Education Loan Eligibility

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How to Pay Your Education Loan in SBI?

Paying back your education loan SBI is designed to be flexible and manageable. Understanding your repayment options is key to a stress-free process. Here's a straightforward guide on how to tackle your SBI education loan repayment, ensuring you're well-informed and prepared.

1. Equated Monthly Installments (EMIs)

After completing your studies, you'll start repaying your loan through monthly payments known as EMIs. SBI allows you to repay your loan over a period of up to 15 years for various education loan schemes. Your EMI will include both the principal amount and the interest, making it a simple way to gradually pay off your loan.

2. Moratorium Period: Interest Payment Options

SBI offers a moratorium period for its education loans. This is a grace period during which you don’t have to pay EMIs. It lasts for the duration of your course plus an additional 6 to 12 months, giving you time to find employment.

Paying Interest During the Moratorium: Although not mandatory, you have the option to pay the interest that accrues during your study period and moratorium. Paying off this interest early can reduce your EMI amount since, after the moratorium, your EMIs will be calculated only on the principal amount.

 

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What are the Ways to Pay Your SBI Education Loan?

SBI recognizes the diverse needs and financial scenarios of its borrowers, offering a spectrum of repayment modes designed for maximum convenience and efficiency. Whether you lean towards modern digital solutions or prefer the reliability of traditional methods, SBI ensures your loan repayment journey is smooth and tailored to your lifestyle.

Online Payment

SBI provides an online portal for loan repayments. You can use SBI’s net banking facility to transfer the EMI amount directly from your savings or current account to your loan account.

  • list items Log in to your SBI net banking account.
  • list items Navigate to the ‘Transfers’ section and select your education loan account.
  • list items Enter the EMI amount and confirm the payment.

Automatic Payment

  • list items National Automated Clearing House (NACH): A facility that allows borrowers to automate their EMI deductions directly from their bank accounts. NACH is designed for efficiency, ensuring timely payments without manual intervention.
  • list items Electronic Clearance Services (ECS): Similar to NACH, ECS facilitates seamless EMI deductions from the borrower's bank account, providing a reliable and automated way to keep up with loan repayments.
  • list items e-NACH (Electronic National Automated Clearing House): As an enhancement to the traditional NACH system, e-NACH introduces a digital mandate system that streamlines the process of setting up automatic payments. This paperless, online authorization can be quickly set up through your bank, making it an eco-friendly and convenient option for initiating and managing your loan repayments.

These automated methods ensure timely payments without the need to remember due dates, offering a worry-free repayment experience.

Check Your Education Loan Eligibility

Manual Payment

You can also make payments manually each month through cheque or cash deposit at any SBI branch. Make sure to mention your loan account number correctly while making the payment.

SBI YONO App: If you are an SBI customer, you can use the YONO app to pay your education loan. The app provides a user-friendly interface for managing and making payments towards your loan.

  • list items Download the SBI YONO app and log in.
  • list items Navigate to the ‘Loans’ section and select your education loan.
  • list items Follow the prompts to make the payment.
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Benefits of Starting your Loan Repayment Early at SBI

Paying off your loan or starting your EMIs during the moratorium period can significantly reduce the total interest accrued, offering substantial savings. Additionally, under Section 80E of the Income Tax Act, you can avail tax benefits for the interest paid on your education loan, further reducing your financial burden. Let us understand some additional benefits of repaying your education loan early at SBI.
 

Benefit Description

Interest Reduction

Reduces overall interest, leading to significant savings.

Loan Tenure Reduction

Shortens loan tenure, freeing borrowers from debt sooner and enhancing financial flexibility.

Financial Discipline

Builds financial responsibility, aiding in future budgeting and financial management.

Decreasing Repayment Pressure

Eases financial transition post-graduation by reducing debt burden early.

Improved Credit Score

Timely repayments boost credit score, improving eligibility for future loans.

Tax Benefits

Offers tax deductions on interest paid, providing financial relief during early career stages.

Calculate your Education Loan EMI

Also Know: Disbursement process of SBI education loan

The repayment of an SBI Education Loan is a journey that demands strategic planning, disciplined execution, and an informed understanding of the available options. By adhering to the guidelines outlined in this comprehensive guide, borrowers can navigate their path to financial liberation, ensuring the fulfilment of their educational aspirations without compromising their financial well-being.

While the SBI provides a robust foundation for financing your higher education through its comprehensive loan services, navigating the myriad details of loan repayment can still be a complex endeavour. This is where GyanDhan steps in, serving as an invaluable partner in making smart choices about your education loan. We stand as a beacon of support, guiding students through the financial complexities of pursuing higher education, and ensuring that their journey is both successful and financially sustainable.

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Frequently Asked Questions

Can I switch my SBI education loan repayment option?

Yes, SBI allows borrowers to change their repayment option, subject to certain terms and conditions.

Are there any tax benefits available on SBI education loan repayment?

Yes, under Section 80E of the Income Tax Act, you can claim a deduction for the interest paid on your education loan.

How can I pay my SBI education loan?

The best repayment method is by making EMI payment that will be automatically debited from the SBI account, you designate at the end of the monthly cycle.

Can I repay SBI education loan early?

The repayment period at SBI starts after one year after the course ends or six months post-employment, depending on whatever happens first. You are required to make monthly payments equal to the EMI amount. Nonetheless, you have the option to pay an amount greater than the EMI without incurring any prepayment fees.

Can I prepay my SBI education loan without any additional charges?

Yes, SBI allows borrowers to prepay their education loan without incurring any prepayment penalties. This can be a strategic move to save on interest costs over the loan tenure.

What happens if I fail to pay an EMI on my SBI education loan?

Missing an EMI payment can affect your credit score negatively. However, SBI may offer a grace period or restructuring options depending on your circumstances. It’s best to contact the bank proactively if you foresee difficulties in making payments.

How can I track my SBI education loan repayment schedule?

Borrowers can track their loan repayment schedule through SBI’s net banking portal or the YONO app. Additionally, periodic statements are provided by the bank, detailing the repayment status and remaining balance.

Check Your Education Loan Eligibility


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