Are you struggling with education loan repayment and meeting your monthly EMIs? Well, worry not! It is quite understandable that unexpected situations can make repayment challenging. Most banks offer options to extend your education loan repayment period if you are facing financial difficulties.
All you need to do is to write a letter to your bank for an education loan extension. This blog will guide you through the process of requesting an education loan extension from your bank.
Table of contents
Overview of Education Loan Extension Letter to Bank
An education loan extension letter is written to the bank to request an extension for student loan repayment. Since life throws unexpected challenges, it sometimes gets difficult to arrange monthly EMIs and contribute towards your education loan repayment. Thus, writing a letter to your bank can help.
You should mention the reasons for the loan extension and assure them of no defaulters once the extension has been granted. Always keep in mind your short-term and long-term financial goals before writing an education loan extension letter to the bank.
To write an education loan extension letter, be mindful of the following things and mention what is important-
- State the purpose of your letter in the subject– requesting an extension on your education loan.
- Briefly explain the reason behind your financial hardship. Be honest and factual, avoiding unnecessary details.
- Suggest a specific extension period that would allow you to get back on track with repayments. Avoid giving the duration in years.
- Emphasize your commitment to repaying the loan and highlight your future earning potential.
- Be polite and professional throughout your communication with the bank.
Also Read: Planning to pursue online courses? Check out the best banks, eligibility criteria, and documentation for education loans for online degree courses.
What to Include in Education Loan Extension Letter to Bank
Before writing a letter to your bank for an education loan extension, it is important to review your finances. You must be clear about your current financial condition and future earning potential. Gather the necessary documents to prove the reasons when contacting them for a loan repayment extension.
Here are some common and necessary things to include in your letter for an education loan extension to the bank-
Reasons
Before you request an extension for an education loan, make sure you mention convincing reasons in your letter to the bank. Some of the common reasons why borrowers might need an extension are-
Job search taking longer than expected- Most banks provide a moratorium period, which is course duration + 6 months to help students find jobs. However, finding the perfect job after graduation can be tough. If the job search is taking longer than expected, an education loan extension allows you more time to secure stable employment.
Unexpected medical bills- Medical emergencies can take a toll on financial planning. An extension in loan repayment enables borrowers to manage their healthcare costs alongside the loan requirements. To know about what happens to education loans when the borrower dies, read our blog.
Loss of Income- Another reason that might be included in the education loan extension letter to the bank is the loss of income. Unforeseen circumstances like job loss or family crisis can significantly impact your ability to repay your loan.
Supporting Documents
Mentioning only the reasons won’t to the completion of a letter to the bank for an education loan extension. Providing proof for the reasons mentioned validates that you are asking for an extension about valid reasons.
Supporting documents like medical bills, job search documentation, or a letter from your employer explaining a temporary income reduction can strengthen your case.
Also Read: Know all about education loans against fixed deposits. Check out the pros and cons, the top banks and how to apply.
Education Loan Extension Letter: Sample Template
The section presents a sample template of an education loan extension letter. Make sure to customise and personalize the content based on your circumstances. Check out the sample letter below-
[Your Name]
[Your Address]
[Date]
To Loan Department
[Bank Name]
[Bank Address]
Subject: Request for Education Loan Extension
Respected [Loan Officer’s Name] / Greetings,
I am [Your Name] and have an education loan account [Loan Account Number] with your bank. The loan was taken to enrol me in [University/ College Name]’s [Degree/Course Name].
I am writing to formally request and ask you for an education loan extension. Unfortunately, I am facing temporary financial hardship due to [Briefly explain your reason, eg- unexpected medical bills.] This has significantly impacted my ability to meet my current monthly instalments.
An extension of [desired extension period] would allow me to [explain how the extension will help you get back on track, e.g., secure employment, manage finances effectively, or complete your studies without undue stress]. I am confident that I will be able to resume full repayments on time after the extension period. I am a dedicated student on track to graduate and secure employment shortly.
I have attached documentation to support my request, including [List Attached Documents].
I remain committed to fulfilling my loan obligations and am confident I can get back on track with a short extension. Thank you for your time and consideration. I am available to discuss my situation further at your convenience.
Sincerely,
[Your Name].
Education Loan Extension Letter: Example
Check below the example of an extension letter written to the bank in order to extend the loan:
This was all about the education loan extension letter. It is important to understand the bank’s risk perspective and loan policies. Follow up politely once the letter has been submitted, to keep your request moving. Consider other alternatives suggest as education loan refinancing and restructuring for lower interest rates.
To know more about education loans, the best bank accounts for students, forex cards, and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience
FAQs
An education loan extension letter is written to the bank if you wish to request an extension for student loan repayment. You should mention the reasons for the loan extension and assure them of no defaulters once the extension has been granted.
To ask for an educational loan extension, you have to write a letter to the bank, stating the purpose of the extension. Briefly explain the reason behind your financial hardship. Be honest and factual, avoiding unnecessary details.
Some of the common reasons why borrowers might need an extension are unexpected medical bills or loss of income. You might also mention if the job search is taking longer than expected.
Supporting documents like medical bills, job search documentation, or a letter from your employer explaining a temporary income reduction can strengthen your case.
You can start as ‘I am writing to formally request and ask you for an education loan extension. Unfortunately, I am facing temporary financial hardship due to [your reason] This has significantly impacted my ability to meet my current monthly instalments. Continue with other information.
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