Education Loan Repayment Planning: A Guide For International Students
Education Loan Repayment
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Education Loan Repayment Planning: A Guide For International Students

Latika Sharma

Studying abroad is an exhilarating journey that opens the doors to new opportunities and growth. However, this overseas education journey often comes with an implied responsibility of managing an education loan and its repayment after graduation. The prospect of education loan repayment brings considerable anxiety along with it. Proper and systematic education loan repayment planning is recommended and essential.

Let’s alleviate the concerns regarding education loan repayments.

Considerations for Education Loan Repayment

When planning to repay an education loan, the following key parameters should be considered:

  • Calculations for education loan repayment
  • Education loan repayment modes
  • Student loan management

All these aspects are discussed in detail in the further sections.

Education Loan Repayment Methods

Top View Calculators Ice Cream Stick Stock Photo 1894313476 | Shutterstock

You can repay this debt in various ways, such as through education loan repayment methods. The following are some of them:

  • Standard Repayment Plan: This payment method involves fixed EMIs over a period, usually ten years or longer.
  • Graduated Repayment Plan: EMI payments start lower and gradually increase over time. This is suitable for borrowers expecting their incomes to rise soon.
  • Extended Repayment Plan: This repayment method extends the existing loan term, resulting in lower monthly EMIs but a higher total interest paid.
  • Prepayment: This method involves paying the loan before the scheduled due date. This approach helps save on interest. However, remember that prepayment of loans mostly comes with a prepayment penalty.

Education Loan Repayment Calculations

The following aspects play a crucial role in making accurate education loan repayment calculations:



Principal Amount

The original amount borrowed from the lender is a loan.

Suppose ABC borrows ₹5,00,000. The principal amount is thus ₹5,00,000.

Interest Rate

Percentage a lender charges when giving you a loan. Always calculate the outstanding amount.

If the lender charges an interest rate of 10% per annum, then the interest for the first year stands at ₹50,000.

Loan Tenure

Duration within which loan has to be repaid.

If the loan is supposed to last for a duration of 10 years, then 10 years is the loan tenure.

Moratorium Period

The period during which the borrower is not required to repay the loan. It usually lasts until course completion or a few months after getting a job.

Suppose you complete your course and get a job. Your lender might not ask you to pay EMIs for the first three months so that you can get back on your feet and not be burdened by EMI payments.

Borrower’s Financial Condition

Borrower’s financial standing and earning potential.

If ABC is not able to pay the EMIs due to financial instability, their payment cycles might be affected. It is suggested to consult your lender in such a case.

Now that the education loan repayment aspects are clear, it will be easier for you to calculate the specific EMI regarding your education loan repayments. Consider the following table as an example:

Principal Amount


Loan Tenure



10% p.a.

15 years


While it may be difficult to calculate your exact EMI, multiple EMI calculators available online can help you do so.

Effective Strategies for Repaying Your Education Loan Abroad

  1. Prioritize high-interest loans: You should first pay off loans with higher interest rates to reduce your overall financial burden in the long run. High-interest loans, when kept for longer durations, attract higher interest payments.
  2. Prefer extra payment in each EMI: Gradually increasing your EMI payment amount can help you save a hefty sum of interest payable. This is because, with each extra payment, your due amount reduces. Hence, the interest is calculated on a lesser-than-usual amount.
  3. Consider Refinancing: Explore refinancing options to manage your overall debt better. If you can secure a lower interest rate from a lender, refinancing your student loan could lead to significant savings and easier repayment.
  4. Opt for the Right Repayment Plan: Selecting a suitable repayment plan is crucial for managing student debt effectively. Understand your grace period and plan based on your expected income after graduation to avoid financial strain.
  5. Part-time jobs: Part-time jobs can be a lifesaver for college students. These jobs come with decent payouts, which can help you sustain a quality life during college and even help you repay your education loan.
  6. Buy insurance: It is recommended you buy insurance that covers your education loan repayment in the case of an unforeseen circumstance. Most banks provide education loans with such insurance to hedge against potential losses.

Education Loan Repayment Modes

There are various payment modes you can choose from to repay your education loan. They are the following:

  • Cash Repayment: This loan repayment was highly used before digital banking picked up pace. However, today, some select lenders might accept cash repayments.
  • Cheque/Demand Draft: Banks and lenders accept repayments through cheques or demand drafts. Some banks even allow the use of post-dated cheques.
  • Online Transfers: With the advent of digital banking, the borrower can quickly repay the education loan online, no matter where they are.
  • Automated EMI Payments: This is the most accessible form of education loan repayment. Services like ECS (Electronic Clearance Services) or NACH (National Automated Clearing House) automate the payment process. Each month, a predefined amount is automatically deducted from the borrower’s bank account.

Tips for Education Loan Management

While you are now aware of all the crucial points when it comes to repayment of your education loan, the following tips can help you effectively manage your loan:

  • Understand and then plan: You must completely understand your loan’s repayment amount and all the terms and conditions. Then, you need to prepare for the next 4-5 years of repayment well in advance.
  • Follow through: While planning is essential, sticking to the plan formulated is equally important. Any deviation from it can result in unforeseen financial losses and an increased economic burden.

Automatic payments: Setting up automatic repayment deductions for your education loan is probably the best thing you can do. It saves the hassle of manually going through the repayment process each month and brings a sense of discipline.


While navigating the world of education loan repayments can be daunting for students studying abroad, it can be effectively managed with the right approach and resources.

If you seek support in education loans, Zolve offers services tailored to the needs of international students and professionals moving to the USA. Zolve offers various financial solutions, including overseas student loans, credit cards, and checking accounts. These help ease the burden of loan management. Want more? They have transparent charges, secure transfers, and a user-friendly digital platform to make transactions reliable and effortless.


1. Can altering my education loan repayment plan affect my credit score?
No. Continuing to pay your education loan should not affect your credit score, irrespective of whether you alter your repayment plan.

2. Can I claim my education loan interest payments on my taxes?

Depending on your country and specific tax laws, you can claim a deduction on the interest repayment on your taxes.

3. What will happen to my education loan if I pursue further studies?
If you pursue higher studies, you can apply for a top-up education loan. This will extend your loan for further studies, but it will also increase the repayment amount. Consult your lender for more details.

4. I am getting a better interest rate in another bank. Can I transfer my education loan from the existing bank there?
If you find better terms on your education loan, you can transfer it to another bank. This is known as an education loan balance transfer.

5. Does currency fluctuation affect my education loan repayment? If yes, how?
Yes, currency fluctuations can significantly impact your education loan repayment, especially if you procured the loan in your home country but are repaying by earning in another currency. Due to currency fluctuations, various challenges can be faced regarding fluctuating repayment amounts and unstable budgeting.