Moratorium Period for Education Loan | Kuber Mindz

By | 05/09/2018

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      Education is vital for the growth of an individual, Education helps an individual think rationally and use facts rather than blind beliefs. But there is income inequality where some people are rich while some others aren’t as rich. India’s First Free Online Financial Advisory, Moneymindz

Income inequality, however, ought not to discourage one from pursuing education. That’s the reason loans are given in the name of Education Loan

What is an Education Loan?

An Education Loan, also known as “Student Debt” is financial assistance acquired from lenders such as banks and financial institutions to fund the higher education of an individual either in the country or abroad.

In simpler words, education loans provide the borrower (usually the student) monetary assistance so as to afford his/her course within the country or anywhere abroad. The borrower could even be a legal guardian of the student. India’s First Free On call Financial Advisory, Moneymindz

Higher education abroad is like a dream come true for many of us. This trend has not begun today; it has been here for a few decades now. The trend is seeing a rise in the current scenario. When parents and students look at the cost of studying in popular foreign destinations, many are aghast due to the high rates.

The solution to this is “Education loan”. This way, the student can easily complete his/her education while the finances are being arranged until the completion of the course. Smart Financial Advisor, Kuber Mindz


What Is A Moratorium Period?

A definite duration of loan tenure in which the borrower doesn’t have to repay anything is called moratorium period. Actually, this is a waiting period in which you, the borrower, need not start paying EMI. This grace period lasts up to six months or until the student gets a job, whichever is earlier.

A borrower of any other loan has to begin paying EMI from Day 1 till the end of the tenure. But you don’t have to do so with a moratorium period. This is provided for Education Loan. Once the student gets a job, he/she can start paying EMI. The RBI has instructed banks to provide six to twelve months of moratorium period so that students get enough time to find suitable jobs to start paying EMI. The interest rate varies depending on the loan amount, the lenders, etc.

Why Moratorium Period?

Prior to the introduction of moratorium periods, banks used to expect students to start paying EMIs immediately after their courses ended, thus forcing them to find alternate and part-time jobs to pay EMIs. This would be a burden on students.

With the introduction of the moratorium period, the student gets sufficient time to find a suitable job and start paying EMIs. You have the option of paying EMI during moratorium period also, as the interest accumulates during the moratorium period.

To know more about Education Loans and Moratorium Period, visit or give a missed call to 022-62116588.

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