An education loan hopes for every student! An education loan is a bridge between students and their big dreams. People do a lot of things to complete their studies and pursue their dreams. After completing the dreams, paying off the loan is the first thing. Paying the loan gives you financial freedom, boosts your credit score for other loans, and you can plan your other financial things.
We all know paying off an education loan is not easy, but at the same time, it’s not impossible. You can manage to pay off your loans with the right plan.
An education loan is handy if you plan correctly at the right time. You should also check your CIBIL score before paying off the loan. It helps you understand your creditworthiness. You can easily do the free CIBIL score check on an online platform. Here are the top 5 tips for successfully paying off your loan:
- Begin Saving Early
It is one of the best savings to pay off a loan successfully. When you take an education loan, you can start saving a small amount. Doing this will help you not have a burden financially at the time of paying off the loan. Saving the amount early also helps you in planning your expenses around your loan repayments. Saving the amount also works in case of any emergency so you can use it and repay the loan. Your expense will manage smoothly after saving some amount earlier.
- Expand Your Earnings
While studying, doing the job, and looking for income are quite challenging. But, in case you have some spare time, you can go for part-time jobs. These things will help you increase your income and help pay off the loan. When you have a higher income, there are chances that you can be free from the loan faster by paying the amount faster. You can offer some home tuition, handle restaurant cash counters, manage mall stores, etc. If you pursue your studies abroad, you will get a lot of part-time job options. When you pay the amount faster, it will help you to have a better credit score. You can do a free CIBIL score check online for the other loans.
- Consider Refinancing
If you are thinking of repaying your loan faster and there is one option, i.e., “Refinancing.” It is also a good option to pay off your loan successfully. It will help you to pay your loan faster by lowering the interest rate and a short time for repayment. However, if you start working after your education, there will be a chance of getting better interest rates. Moreover, this option is available when you manage a solid credit history or have a creditworthy co-signer.
- Claim Tax Deductions
It is also one of the best ways to repay the loan successfully. You can claim the tax deduction on your education loan. There is a tax deduction under Section 80E of the Income Tax Act. The amount you claim is according to the total interest you pay on your loan annually. However, this can only be claimed by the loan applicant paying off the loan.
- Pay Off Better Than the Minimum
Paying off more than actual is quite challenging, but it is possible. It works for you to pay off your loan faster and successfully. It is one of the fastest ways to get rid of debt free. After that, there will be less interest rate because the remaining amount will reduce. If you want another loan, faster paying will give you a better credit score. There are many online platforms where you can do a free CIBIL score check to get other loans.
- Sum up
Therefore, the first loan people like to take before they start earning is an education loan, which is important for having a better credit score. We suggest you all pay the education loan timely with the help of the tips and tricks mentioned above. You also do a free CIBIL score check online after paying off the loan completely.