Can I Get Education Loan without Interest?

First, no education loan comes without interest or zero interest. Unlike Personal Loans, education loans are specialised loans with their own interest rates and terms.

Education in India is expensive, and not every student may afford it. If you are planning for a higher study in a reputed institute, then be prepared to pull out the education cost throughout the course.

However, an education loan is a specialised loan with strict eligibility criteria and documentation requirements. And there is so much analysis for students' loans from the lender's side. It requires specific paperwork like your academic records, collateral documents if taking a secured education loan by mortgaging an asset.

Taking an education loan supports basic educational expenses. But apart from educational costs, there are other expenses that students have to bear despite taking an education loan.  Here, an unsecured loan for education, like a Personal Loan, which is a collateral-free loan can be an ideal option.

Till date, no such scheme has been introduced for getting an education loan without any interest. But there are government schemes that provide a moratorium period of up to 1 year to the students.

What is the repayment grace period in an education loan?

The lender usually decides the moratorium period, which typically covers the course duration plus a grace period of six to 12 months after course completion. The borrower does not have to repay the lender during the moratorium period. Hence, it is not possible to get an education loan without any interest.

What will be the education loan interest rate?

The education loan interest rate may vary from lender to lender. It can be higher as well as lower based on your credit ratings. As a result, a lender will not risk giving the loan to those borrowers who have low creditworthiness.

A Personal Loan for Education usually has higher interest rates than an education loan but can be used not only for education but also for other related expenses that are not related to education. Nowadays, the Personal Loan procedure is entirely digitised, and the required documents are minimal.

At Hero FinCorp, you can get a Personal Loan for Education from Rs 50,000 up to 5,00,000 at a competitive interest rate starting from 1.58% per month. You can get approval in 10 minutes with minimum documentation and a monthly income of Rs 15,000 only. 

Options to Reduce Education Loan Interest Rate

While no lender provides education loans without interest rate, there are many ways you can reduce the interest payable.

1. Moratorium or Grace Period

When you take an education loan, the repayment starts soon after the grace period. It is usually the tenure of your course plus six months to 1 year grace period. During this time, interest is charged on the amount of the loan, which can be added to the principal or repaid as it is accrued, as per the terms of the lender.

Pro Tip: If you have the means to pay, you can pay the interest during the grace period to reduce the overall interest paid on the loan.

2. Government Subsidies and Schemes

The Government of Indiaprovides subsidies and schemes that help students reduce the interest on their education loans. For example -

• Interest Subsidy Scheme: Students from financially weaker sections of the society or minority communities may get the subsidy on interest.
• Subsidised Loans for Some Courses: Some schemes provide subsidies or lesser interest charges for students who are enrolled in certain courses such as engineering, medicine, and MBA.

3. Scholarships

Many lenders, both in India and abroad, provide scholarships, which students can use to pay the interest portion of their loan.

• Merit-Based Scholarships: These scholarships are provided based on a student's academic performance. These can help in minimising the financial load.
• Need-Based Scholarships: These scholarships are given to students who show that they have financial need and can help lower the interest payments.

4. Repayment Strategies

After your loan is in the repayment period, there are some strategies you can use to lower the interest payable:

Paying Higher EMIs Early: If you get a good job upon completing your studies, try paying a higher EMI amount every month. This will shorten the loan period, thus lowering the overall interest payout.

Prepayment: Most lenders like Hero FinCorp permit prepayment of the loan without charging a penalty. In this way, you can save yourself from long-term accumulation of interest.

5. Refinancing Options

If you are having trouble with a high interest rate on your loan, you can choose to refinance it. You can get lower interest rates through some lenders. This can make your monthly payments more affordable and lower your total interest payable.

Also Read : All About Loans 

Why Choose Hero FinCorp App for a Personal Loan for Education?

The Hero FinCorp loan app is a user-friendly app when it comes to applying for an instant loan for education or any other reason. The app can be downloaded on your smartphone anytime. There is no restriction involved while applying for a Personal Loan for education. You can use the money for not only paying off the fees but also for other miscellaneous expenses. 

Also Read : Everything About Flexi Hybrid Loans

Features and benefits of online instant Personal Loan for Education

• No collateral is required to avail the loan
• Attractive interest rate based on your profile
• Instant approval within 10 minutes
• Quick disbursal after the approval 
• Flexible repayment tenure - 12 to 36 months
• Use the loan EMI calculator to know your EMI amount in advance
• Paperless documentation - KYC details and proof of income
• Simple eligibility criteria including your age, income, work experience and Indian citizenship

How to apply for a Personal Loan for Education?

Here is a stepwise process to apply for a Personal Loan for Education online with Hero FinCorp:

• Visit the Hero FinCorp website or install the personal loan app
• Go to the Personal Loan page and click ‘Apply Now’
• Enter your mobile number and verify with the OTP received
• Choose the loan amount you need
• Verify your KYC details to check income eligibility
• Click ‘Submit’ to complete your application

With the above features, you can get a Personal Loan for Education without any hassle. Most importantly, a Personal Loan does not require the academic record of the student. 

Also Read : Payday Loans in India‚ What Is a Payday Loan and How It Works in India?

Conclusion

You cannot get an interest-free education loan, but you can lessen the financial load of the loan by repaying them timely, using government subsidies, and applying for scholarships. Hero FinCorp can provide unsecured Personal Loan for Education with minimal documentation and quick approval to fund your education.

Frequently Asked Questions 

Q: Can I get an education loan without interest?

No, education loans without interest are not offered by the lenders. Nonetheless, you can lessen the burden through moratorium or grace periods, government subsidies, and scholarships.

Q: What is a moratorium period for an education loan?

A moratorium or grace period is a period where you do not need to repay the principal amount of your loan. Usually, this period is the length of your course plus up to one year. A simple interest is only charged during this time.

Q: How do I apply for subsidies on education loans?

The eligibility for subsidies is based on a number of factors, i.e. the income of your family, what course you are doing, if you belong to a backward class or minority, etc. You can contact your lender or check the government schemes offered.

Q: Can I refinance my education loan for a lower interest rate?

Yes, some lenders have refinancing options, which will allow you to repay your old loan with a new loan at a lower interest rate. It will lessen the interest burden throughout the loan tenure.