What Will Happen If I Don't Pay Back My Student Loans On Time?

Everyone hopes for a profession that is financially rewarding. Graduating with honors from a reputable higher education institution is the first step in realizing this objective. But tragically, it takes more than just effort, focus, and commitment to realize this desire.

In India, the price of higher education has increased significantly during the past ten years. It is challenging for parents to pay for their children's ideal education due to inflation, rising tuition costs, and the cost of student housing.

Overview of Education Loans in India

The student or the student's parent may borrow money to pay for higher education in India. Both students looking to attend college or university abroad as well as those who want to pursue higher education in India can use it. For undergraduate, graduate, and vocational programs, loans are also available.

The following are the key benefits of taking out an education loan:

· Tax advantages under Section 80E for interest paid on student loan repayment.

· Competitive interest rates - Female students also receive significant interest rate breaks, which lowers the overall debt load. While taking out an education loan, the government also provides subsidies for students from underprivileged castes and tribes.

· The loan is easily accessible at all reputable banks and other NBFCs.

· One of the key advantages of taking out a student loan is the flexible repayment period. With other loans, repayment starts as soon as the money is received; however, with education loans, repayment doesn't start until the student has finished their studies. Students also receive a moratorium of between six and twelve months after finishing the course. This time frame enables students to postpone loan repayment until they begin to make money.

• Pays for all costs - In addition to covering tuition, education loans also pay for other costs that students may incur, such as those for books, housing, and other miscellaneous expenses.

Lenders differ in terms of the loan amount sanctioned and the interest rate levied. It depends on a number of variables, including whether you provide collateral and the guarantor's credit score, among others.

What happens if I am unable to repay my education loan?

Everyone hopes to land a job and begin making money as soon as they graduate from college or university. It might not always be possible to find a wonderful career after graduation due to circumstances beyond our control. You might not be able to get employment directly out of college due to the unstable labor market, not landing the ideal position, or failing a course.

A person may also lose their work, which would prevent them from receiving a paycheck in time to pay back the EMI. You run a considerable risk of defaulting on your student loan in such circumstances.

Like any other debt, not making your school loan payments on time has a number of drawbacks. Consequences of not repaying an education loan range from losing your pledged asset to receiving a negative mark on your credit report.

The effects change depending on the amount borrowed, the type of loan, etc. Let's examine what occurs in various situations when you are unable to repay your student loans.

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