Education loans from Canara Bank offer financial assistance to pursue higher education in India and abroad. Various loan schemes like Vidya Turant and the IBA Model Education loan scheme offer loans for up to 15 years. Setting an effective Canara Bank education loan repayment plan is necessary to ease the financial burden. You can choose automatic debits to make timely payments and avoid penalties. Let’s explore major details related to the loan process and repayment for the Canara education loan.
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Overview of Canara Bank Education Loan Repayment
Canara Bank offers education loans that can be repaid for up to 15 years, excluding the moratorium period. The loan is repaid in Equated Monthly Installments (EMIs) based on your monthly income. It means you pay the principal amount and interest component of the education loan at a fixed date every month till the entire loan amount is paid.
Unlike other banks, Canara Bank does not charge any prepayment penalty if you plan to prepay the education loan at any time during the repayment period. Foreclosing your loan earlier helps you improve your credit score, saves interest payments, and gives you financial freedom.
| Canara Bank’s Education Loan Repayment Terms | |
| Repayment Tenure | Up to 15 years, excluding Moratorium Period |
| Instalments | Paid as Equated Monthly Installments (EMIs) |
| Prepayment of Loan | No prepayment penalty |
Also Read: Know all about early repayment charge of education loans and understand the major benefits of foreclosing your loan as soon as possible.
EMI Calculator
- Using an education loan EMI calculator can help you decide which education loan repayment plan you should choose.
- Simply enter the loan amount, interest rate, and repayment tenure.
- The calculator will process your inputs and provide you with the monthly EMI amount you will need to pay.
For example, your EMI will be INR 18,262 if you take an education loan of INR 10 lakhs at 11.50% p.a for 7 years.
Your financial income and monthly expenses will help you determine whether you should choose the Canara Bank education loan repayment plan that suits your financial needs. A shorter repayment tenure has higher EMIs but lower interest rates and a longer repayment tenure has lower EMIs but higher interest rates.
Canara Bank Education Loan Repayment Plans
You can make Canara Bank education loan repayment in various ways. The most effective strategy would be to start making interest payments during the moratorium period. This reduces the principal amount before full repayments begin. Make sure to set up NACH or ECS for automatic deductions to ensure timely payments and avoid penalties. Here are some repayment plans for effective payments-
Standard Repayment Plan
It is the most common method of education loan repayment. You make fixed monthly payments over a set period, typically 10-15 years. You should choose this plan if you have a consistent monthly income that allows you to make a pre-decided payment every month.
The Standard repayment plan for Canara Bank education loans will have lower total interest paid compared to longer repayment plans because the loan is paid off more quickly.
Extended Repayment Plan
The extended repayment plan allows for longer repayment periods if you are struggling with EMIs. This reduces the monthly burden by making smaller payments towards the loan amount. However, it may increase the total interest paid over time but is beneficial for those with lower starting salaries or other financial obligations.
Make sure to choose this education loan repayment plan only when you can sustain long-term repayments. You can simply write an education loan extension letter to the bank to extend repayment tenure, often up to 15 to 25 years.
Graduated Repayment Plan
In this type of repayment plan, you start with lower payments that gradually increase over time, typically, every two years. This plan is perfect if you anticipate income growth in the future. It allows for manageable initial payments while preparing for future financial stability.
Also Read: Check out this blog to know the frequently asked questions (FAQS) on personal loans for debt consolidation.
Modes of Canara Bank Education Loan Repayment
When making Canara Bank education loan repayments, you can choose various modes to repay. The bank offers convenient online and offline repayment options that can be selected as per your convenience.
| Repayment Options | Details |
| Cheques | This traditional method requires you to submit a monthly cheque to the bank. |
| Post-Dated Cheques (PDCs) | These are pre-signed cheques for future EMI payments. This lets you make timely payments but requires careful management of cheque dates. |
| National Automated Clearing House (NACH) | This is an automatic payment feature. You need to sign an NACH mandate, allowing the lender to deduct EMIs directly from your bank account on the due date. |
| Electronic Clearance Services (ECS) | Similar to NACH, this lets you make auto-debits by signing the ECS mandate. It takes 3-4 days for settlement. |
| Digital Payments | You can also pay student loans with credit cards and other digital payment methods like UPI apps and internet banking. |
This was all about Canara Bank education loan repayment. Choosing the right plan and mode for education loan repayment is crucial for managing your finances effectively. Consider factors such as your income stability, financial goals, and comfort with automated payments when making your decision.
To learn more about education loans, the best bank accounts for students, forex, and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
FAQs
Canara Bank education loans can be repaid via various payment modes, including cheques, post-dated cheques, NACH, ECS, and digital payment methods.
You can use the EMI calculator. Enter the loan amount, interest rates, and repayment tenure to get the EMI amount. Based on your EMI and monthly income, you can choose the right loan repayment plan.
The different types of loan repayment plans include standard repayment plans (paying fixed EMIs), extended repayment plans, graduated repayment plans, and income-driven repayment plans.
To pay your Canara Bank education loan online, you need to go to Canara Bank’s net banking service. Navigate to the loans section, enter the loan account number, and pay using credit or debit card details.
It is best to foreclose your Canara Bank education loan early for financial freedom. Unlike other banks, Canara Bank does not charge any prepayment penalty if you plan to prepay the education loan at any time during the repayment period.
