Repaying an education loan from the State Bank of India involves several steps and key considerations. Understanding the moratorium period and repayment options, and exploring a suitable payment plan are crucial to ensure a smooth process. Various strategies, like interest payments during the holiday period and timely payments via auto-debits, help you repay your SBI education loan effectively. Let’s explore important terms and conditions and learn more about the SBI loan repayment plan in detail.
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Overview of SBI Education Loan Repayment
SBI education loan repayment begins after completing the course and the moratorium period. This means that the repayment starts one year after course completion or six months after securing a job, whichever is earlier.
| SBI Education Loan Repayment Plan | |
| Repayment Tenure | 15 years, or 180 EMIs |
| Moratorium Period | Course Duration + 12 months or 6 months after securing a job, whichever is earlier |
| Prepayment Penalty | NIL |
SBI Education Loan Repayment: Major Factors
The loans must be repaid in Equated Monthly Installments (EMIs) for a maximum repayment tenure of 15 years, or 180 EMIs. If you have taken an SBI Student or SBI Scholar loan, the repayment begins 12 months after course completion or six months post-employment. However, for the SBI Global Ed-vantage education loan, repayment commences six months after completing the course.
- If the loan interest is not paid during the moratorium period, the accrued interest is added to the principal amount, with repayments structured as fixed EMIs.
- If you pay the full interest before repayment begins, your EMI will be calculated based solely on the principal amount.
Also Read: Check out the major SBI education loan schemes to study abroad and in India. Learn about their features and eligibility criteria.
How to Repay SBI Education Loan?
State Bank of India lets you repay your education loan in easy instalments. Their online payment portal and SBI YONO App lets you set automatic payments and repay SBI education loans in the easiest way possible. Here are the steps to follow-
Online Repayment
- Log in to your SBI internet banking account.
- Navigate to the ‘Transfers’ section.
- Select your education loan account.
- Enter the EMI amount.
- Choose the payment method and confirm your transaction.
Repayment Via SBI YONO App
- Download the SBI YONO app and log in.
- Go to the ‘Loans’ section.
- Complete the payment process as guided in the app.
Modes of Repaying SBI Education Loan
Repaying your SBI education loan can be done through several convenient methods. These include paying manually via cheques and post-dated cheques or setting up automatic payments via ECS and NACH modes. Let’s find out the possible modes of repayment that let you make timely payments towards your SBI Education Loan-
| Modes of Repayment | Details |
| Electronic Clearance Service (ECS) | EMIs are automatically debited from your bank account, ensuring timely payments without manual intervention. |
| e-NACH (Electronic National Automated Clearance House) | EMIs of higher amounts can be easily paid towards education loans by setting auto-debit features. |
| Post-Dated Cheques (PDS) | You can provide checks dated for future months, which is suitable for those who prefer traditional payment methods. |
| Demand Draft | If electronic payments are not feasible, you can issue a demand draft in favour of the lending bank. |
Also Read: Want lower interest rates on existing education loans? Explore key highlights of SBI takeover of education loans and how to apply for them.
Ways to Reduce SBI Education Loan Repayment Costs
Making timely payments is one of the effective ways to avoid any additional charges related to late payments. Besides, if you pay interest during the moratorium period, you can avoid it being added to the principal amount. Check out some of the ways and strategies that must be followed to reduce your education loan costs-
- The best way is to make interest payments during the moratorium/ holiday period. This not only reduces the overall repayment burden but also makes you eligible for a 1% interest concession on interest rates, further lowering your SBI loan repayment costs.
- Secondly, education loans qualify for tax deductions, meaning that interest paid on education loans can be claimed for deductions under Section 80E of the Income Tax Act by availing SBI interest certificate from the bank.
- If you belong to the EWS category, you can take advantage of the Central Scheme for Interest Subsidy, which can significantly reduce your financial burden during repayment.
- You can make prepayments without penalties after six months of loan disbursal, which can help reduce overall interest costs.
This was all about the SBI education loan repayment plan. Make sure to choose the convenient method to repay your loan and make timely payments by maintaining an adequate balance in your account and setting auto-debits. Follow the tips given to reduce your repayment costs and pay off your SBI education loan effectively.
To know about education loans, the best bank accounts for students, 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
You can repay your SBI education loan through various methods. These include online banking, via the SBI YONO app, or by visiting an SBI branch to make payments.
The repayment period for SBI student loans is up to 15 years, starting one year after course completion or six months after securing a job, whichever occurs first.
Yes, you can close your education loan early with SBI without any penalties. This also lets you save on interest costs and reduce the overall repayment burden.
There are no prepayment charges for SBI education loans, enabling borrowers to repay their loans early without incurring additional fees.
Repayment starts after the moratorium period, which includes the course duration plus a grace period of 6-12 months, with EMIs calculated based on the principal and accrued interest.
