Mar 23, 2025

8 Education Loan Mistakes to Avoid in India

Kuhu Verma

Not Comparing Options

Being unaware of different banks and NBFCs offer varying interest rates, loan tenures, and repayment options.

Source: canva

Ignoring Moratorium Period

The moratorium period allows students to delay EMI payments, but some banks charge interest during this time.

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Choosing Short Loan Tenure

A shorter tenure means higher EMIs. While it helps clear debt faster, it may strain your budget

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Overlooking Government Schemes

The Indian government offers schemes like the Interest Subsidy Scheme for certain economic sections.

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Borrowing More than Necessary

Calculate the required amount based on tuition fees, living expenses, and scholarships before applying.

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Floating vs Fixed Interest Rate

Floating rates can change over time, affecting EMIs, while fixed rates offer stability.

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Delaying EMI Payments

Delaying EMIs affects credit scores and may lead to penalties. Try using an auto-pay feature for loans.

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Ignoring Payment Options

Many banks allow prepayment without penalties. Making partial prepayments whenever possible can reduce interest burden.

Source: canva

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