HDFC Credila education loan repayment starts after the moratorium period ends. You can get a repayment holiday of course period + 1 year or 6 months after getting a job (whichever is earlier). Education loan repayment can also be started during the course period. You can start repaying the interest on a loan to HDFC Credila during that period which will ultimately reduce the overall cost of the loan. HDFC Credila education loan repayment process also allows you to pay more than the EMI monthly.
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HDFC Credila Education Loan Repayment Terms
HDFC Credila offers students flexibility in loan repayment which allows them to manage their finances while they focus on their studies and during their initial years of employment. Check some major terms of the HDFC Credila education loan below:
Moratorium Period
The moratorium period, also known as the repayment holiday, is a grace period during which the borrower is not required to repay the principal amount. HDFC Credila repayment process offers a moratorium period of course period + 1 year or six months after getting a job, whichever is earlier. However, students may have to pay the interest amount during this period, depending on the loan terms.
EMI Repayment Period
Once the moratorium period ends, the borrower needs to start repaying the loan in Equated Monthly Installments (EMIs). The EMI consists of both the principal and interest components and is calculated based on the loan amount, interest rate, and tenure. HDFC Credila offers flexible repayment tenures, generally ranging from 10 to 15 years.
Interest Rate and EMI Calculations
The interest rates offered by HDFC Credila start from 13.80%. It depends on various factors such as the applicant’s credit score, co-applicant’s financial stability, and loan amount. The interest is charged on a simple interest basis during the moratorium period, and it is compounded after the moratorium period. The EMI is calculated using the following formula:
EMI = [P x r x (1+r)^n] / [(1+r)^n – 1], where ‘P’ is the principal amount, ‘r’ is the rate of interest, and ‘n’ is the tenure of the loan in months.
Prepayment and Part-Payment Options
HDFC Credila allows borrowers to make early repayments or make part-payments towards their education loan without incurring any prepayment penalties. Most banks and financial situations do not implement any early repayment charges on education loan. This feature can be highly beneficial for students who want to reduce their debt burden early and save on interest costs. By making lump-sum payments towards the principal, students can lower their EMIs or shorten their loan tenure.
Repayment Channels
HDFC Credila provides multiple repayment options for borrowers. You can pay online or by physically visiting the branch. Check some of the common channels of payment below:
- Electronic Clearing Service (ECS): Monthly EMIs can be automatically deducted from the borrower’s bank account.
- National Automated Clearing House (NACH): Another electronic mode for automated payments.
- Post-Dated Cheques: Borrowers can submit post-dated cheques for the EMI amounts.
- Standing Instructions (SI): Students can set up standing instructions to debit EMIs from their accounts.
Co-applicants Role in Repayment
In HDFC Credila education loans, a co-applicant (generally a parent or guardian) is required. If the student is unable to start repayment due to unforeseen circumstances such as delay in employment, the co-applicant becomes responsible for loan repayment.
HDFC Credila Education Loan Repayment: Allocation of Payments
Payments are automatically allocated across all loans within a loan group. The payment is applied first to any delinquent loans, with priority given to the loans that have been delinquent the longest. Once all loans are current or at the same level of delinquency, the payment is distributed proportionally to each loan based on its monthly payment amount. Check more details below:
- If the borrower does not pay the full amount due, all loans in the loan group may become delinquent and it may be reported to credit agencies.
- If a payment is made without a remittance slip but matches the amount on the statement, it will be allocated as described.
- If the payment amount does not exactly match the statement, it will be allocated across all loans, including those in different loan groups that share the same payment address.
- Once a payment is allocated to a specific loan or loan, it is applied according to the terms of each loan’s promissory note.
HDFC Credila education loan repayment structure is designed to provide flexibility and ease for students. By understanding the repayment terms, moratorium period, and various repayment options, borrowers can better manage their loans and avoid unnecessary financial stress. Check some FAQs based on the same below:
FAQs
The repayment generally starts after the completion of the course. HDFC Credila offers a moratorium period of course period plus one year or 6 months after getting a job.
HDFC Credila provides multiple repayment options for borrowers like Electronic Clearing Service (ECS), National Automated Clearing House (NACH), post-dated cheques, and standing instructions (SI) for automatic debit from the borrower’s bank account.
Yes, HDFC Credila allows borrowers to make prepayments or part-payments towards their education loan without charging any prepayment penalties. This helps borrowers reduce their overall loan tenure and interest burden by paying off the loan earlier than the scheduled tenure.
If a borrower misses an EMI payment or pays less than the required amount, the loan can become delinquent. This may lead to late fees, and the delinquency may be reported to credit agencies.
Yes, borrowers can negotiate changes in EMI amount or loan tenure with HDFC Credila, depending on their financial situation. By extending the tenure, borrowers may reduce the EMI amount.
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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