Bank of India loan repayment plan can be managed easily if you understand the process. Bank of India provides education loans under the BOI Star Education Loan scheme to study abroad. The loan repayment can be done using multiple modes of payment like cheque, setting ‘Standing Instructions’ etc. If you have additional funds, you can also make part payments and the bank may waive the interest amount for that amount. Banks do not take any early repayment charges on education loans so you can close the loan before maturity without any extra charges.
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What is the Bank of India Loan Repayment Plan?
The repayment phase is an important part of the education loan journey. Bank of India offers a well-structured repayment plan that is designed to ensure that students can repay the loan without financial stress. Below are the major components of the repayment plan:
Moratorium Period
The moratorium period, also known as the repayment holiday, gives students enough time to start earning after they complete their course. During this time, students do not need to pay the principal amount. However, interest may accumulate unless it’s subsidised under government schemes like the Interest Subsidy Scheme for economically weaker sections. The moratorium period is the course duration + 1 year or 6 months of employment, whichever is earlier.
Also Read: Check here all the details about SBI Forex Card for international students
Simple Interest During Moratorium
During the moratorium period, the bank charges simple interest. It is advisable to pay this simple interest during that period as it helps in reducing the overall burden. If the interest during this period is not paid, it gets added to the principal at the end of the moratorium which will ultimately increase the EMI amount.
Repayment Schedule
Once the moratorium period ends, students are expected to start repaying the loan in equated monthly instalments (EMIs). The repayment tenure is quite flexible and it usually from 7 to 15 years, depending on the loan amount. Most banks allow a repayment period of up to 15 years. This long repayment tenure ensures that the EMIs remain affordable, even if the loan amount is high.
Prepayment Options
BOI allows for the prepayment of the loan without any penalty. If you have excess funds, you can foreclose it and save money that you would have paid as interest. Moreover, making lump-sum payments or increasing EMI amounts can help students close the loan faster and plan for other loans.
Repayment via ECS or Online Mode
To make repayment easier, BOI offers Electronic Clearing System (ECS) mandates. In this method, the EMI is automatically deducted from your bank account every month. Students can also repay the loan through online banking, mobile apps, or by visiting the nearest BOI branch.
Grace Period for Late Payments
Bank of India provides a limited grace period for any delayed payments, but regular late payments can lead to penalties. The charges will include bounce charges, penalties and GST for that amount.
Education Loan Interest Subsidy Scheme
For economically weaker sections (EWS), the government offers an interest subsidy during the moratorium period. Under this scheme, students from families with an annual income of less than INR 4.5 lakhs can avail themselves of full interest subsidy during the moratorium period.
Also Read: Check here all the major details and features of the Bandhan Bank Education Loan to study abroad.
Key Features of Bank of India Education Loan
Bank of India is one of the best banks in India and a popular choice among students. It follows the IBA Model Education Loan Scheme like all the other banks. Check some of the major features of the Bank of India education loan to study abroad:
- BOI offers up to INR 1.5 lakh for studies in India and studying abroad.
- Bank of India education loan Interest rates usually range between 9% to 12%, depending on the loan amount and the borrower’s profile.
- BOI offers a moratorium period that includes the course duration plus an additional 6 months to 1 year after completing the course.
- Loans up to INR 4 lakhs are unsecured and don’t require a co-applicant, while loans above INR 7.5 lakhs usually require collateral.
- The maximum repayment tenure is 15 years which makes it manageable for students to pay back the loan in smaller EMIs.
Bank of India loan repayment plan is designed for students with the purpose of providing financial relief. By understanding the repayment structure and following smart financial practices, students can effectively manage their loan repayment.
FAQs
The repayment period for Bank of India education loans ranges is up to 15 years, depending on the loan amount.
Repayment starts after the moratorium period, which covers the course duration plus an additional 6 months to 1 year after course completion or upon securing employment, whichever comes first.
Yes, the Bank of India allows prepayment of the education loan without any penalty. Students can make lump-sum payments or increase EMI contributions.
Yes, the government offers an interest subsidy during the moratorium period for students from economically weaker sections (EWS) under the Education Loan Interest Subsidy Scheme. This applies to students whose family income is less than INR 4.5 lakhs per annum.
EMIs can be paid through the Electronic Clearing System (ECS), where the EMI is automatically deducted from your account. You can also pay via online banking, mobile apps, or by visiting a BOI branch.
To know 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 study abroad experience.
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