HDFC Education Loan Repayment process must be understood by the students before applying for the loan. HDFC Bank is one of India’s leading banks. It offers education loans to students planning to study abroad. The bank usually accepts loan repayment through auto-debit methods. Let’s explore the HDFC Education Loan repayment process, various modes of repayment, and the benefits of timely repayment. This information will guide you through the crucial financial steps after securing your HDFC education loan.
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HDFC Education Loan Repayment Process
HDFC Bank offers flexible education loan repayment plans to suit the financial situation of every student. The repayment process starts once the student has completed their studies or after they get a job. Here’s a step-by-step breakdown of how the HDFC education loan repayment works:
Grace Period
HDFC offers a moratorium period in education loans to students. It is also called a grace period or repayment holiday. This period typically lasts until 6 months to 1 year after the student completes their course or secures a job, whichever comes first. During this time, you are not required to make any repayments. The interest during this period is usually added to the principal loan amount.
Repayment Start
Once the grace period is over, the repayment will begin. The tenure for loan repayment depends on the loan amount and the student’s financial capabilities. Typically, the repayment tenure can range from 5 years to 15 years.
Also Read: Check here some of the most common FAQs on education loan repayment
Equated Monthly Installments (EMIs)
Repayment is made through EMIs (Equated Monthly Installments). The EMI amount is fixed and includes both the principal and the interest. You can choose a comfortable tenure depending on your post-graduation employment situation. The EMI amount may increase or decrease with the loan tenure.
Modes of Repayment for HDFC Education Loan
HDFC offers several convenient modes of repayment for education loans to suit the borrower’s preferences. These include online payments through HDFC’s portal, Electronic Clearance System (ECS) for automatic EMI deductions, Post-Dated Cheques (PDCs) for scheduled payments, and offline options like Demand Drafts or cash payments at HDFC branches. Check the details of the mode of payment for HDFC Education Loan repayment below:
Online Payment via HDFC Bank Portal
Students and their parents can log into the HDFC Bank portal to make direct payments. This method is easy and quick, enabling users to pay their EMIs through Internet banking, debit/credit cards, or UPI.
Electronic Clearance System (ECS)
For hassle-free repayments, HDFC offers the ECS method where the EMI (Equated Monthly Installments) is automatically deducted from the borrower’s bank account on the due date. You need to set up ECS with your bank to authorize this process.
Post-Dated Cheques (PDCs)
Post-dated cheques (PDCs) are a popular repayment method for HDFC education loans, where borrowers provide cheques with future dates to cover their EMIs. These cheques are submitted at the start of the loan repayment period, and HDFC Bank will present them for payment on the specified dates. This method ensures timely payments without requiring the borrower to manually initiate transactions each month, making it a convenient option for those who prefer traditional payment methods.
Also Read: Want to foreclose the loan without extra charge? Check here all about early repayment charges on education loan
Benefits of Timely Repayment of HDFC Education Loan
One of the major advantages of repaying your education loan on time is the improvement in your credit score. A good credit score is crucial when you plan to apply for a loan or credit card in the future. Timely repayment will enhance your creditworthiness and ensure that you’re eligible for better financial products at favourable interest rates. Check some major benefits of timely repayment of HDFC education loan below:
- Failure to repay on time may result in penalties and late fees, which will increase your overall loan burden. Hence, always pay the EMI on the scheduled date.
- By sticking to your repayment schedule, you can manage your finances better and avoid financial stress. On-time payments will give you peace of mind, allowing you to focus on your career or further studies.
- Having a clean repayment track record will make it easier for you to obtain additional loans, such as home loans, car loans, or personal loans, in the future.
- HDFC Bank values customers who maintain a good repayment history. Timely repayment not only helps you build a strong relationship with the bank.
HDFC education loans provide an excellent opportunity for Indian students looking to pursue higher studies abroad. Understanding the HDFC education loan repayment process, the available repayment methods and the importance of timely repayment can help you navigate the financial journey after your studies. Check some FAQs on HDFC education loan repayment below:
FAQs
The repayment process starts after the grace period, which usually lasts 6 months to 1 year after completing the course or securing a job. EMIs are paid monthly, including both principal and interest, with flexible repayment tenures ranging from 5 to 15 years.
HDFC offers a grace period of 6 months to 1 year after course completion or job acquisition, during which no repayment is required. Interest is typically added to the principal during this period.
Repayment can be done via online payment, Electronic Clearance System (ECS), Post-Dated Cheques (PDCs), or offline methods like Demand Drafts and cash at HDFC branches.
Yes, HDFC allows early repayment of the loan without any prepayment penalty. However, it’s important to check the terms regarding part payments and the effect on interest.
Missing a repayment may lead to penalties, late fees, and an increase in the outstanding loan amount. It can also negatively impact your credit score.
To set up ECS, visit your bank and authorize HDFC to automatically deduct the EMI from your account on the due date. This ensures timely, hassle-free payments.
Yes, you can request a change in the EMI date with HDFC Bank, but it must be done before the due date and may involve certain conditions.
Late repayments may result in penalties, an increased loan balance due to interest accumulation, and a negative impact on your credit score.
HDFC offers education loans with amounts ranging from INR 50,000 to 1 crore for studying abroad. The loan amount depends on factors like course and university.
Yes, under Section 80E of the Income Tax Act, you can claim tax deductions on the interest paid towards the education loan, provided it is for higher education.
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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