Education loans and repayment

By Pradeep Yuvaraj | June 23, 2011

A recent press report said that the regular payment of education loan will help students to maintain their credit profile. Normally, education loans repayment starts six to twelve months after the completion of the course or after gaining an employment whichever is earlier.

The report further said that in case the family income from all sources is lower than 4.5 lakhs then the loan applicant can obtain an income certificate from the states issuing authority and get a subsidy on the entire interest during the moratorium.

Banks and NBFCs provide a record of your loan and credit card payments to the credit information companies such as Experian. A CIC is usually an independent organisation that complies public data, identifies information, credit transactions and payment history of the customers.

When an applicant applies for a loan, banks have to make sure who the applicant is, and the applicant is likely to repay the loan. They will look for the information in the application and will check the credit report from a CIC. If the report shows that you repay credit on time and this usually help out get the credit at favourable terms.

Thus it is important to maintain a good credit history.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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