How to Repay SBI Education Loan?
Education Loan

How to Repay SBI Education Loan?

How to Repay SBI Education Loan?

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Learn how to repay SBI education loan with ease. Know ways to repay your SBI education loan and the benefits of prepayment.

GyanDhan
Ananya Ghai
Updated on:  12 Jun 2024  | Reviewed By:  Aman  | 6.79K | 12  min read

The path to a university represents an important turning point that necessitates careful budgeting and investment. Recognizing the vital role that education plays in fostering personal development and advancement, the State Bank of India (SBI) provides prospective students with a wide range of education loan services. Higher education can be accessed with an SBI Education Loan, but many people find difficulties during the payback period. Planning for the future and keeping a high credit score depend on knowing how to repay SBI education loan.

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Key Features of SBI Education Loan

Feature Description

Loan amount

INR 7.5 Lakh - INR 1.5 Cr

Rate of interest

Men: 10.65 - 11.15
Women: 10.65 - 10.15 

Processing fees

INR 10,000 + GST (Non-refundable)

Margin money*

INR 7.5 Lakh-INR 20 Lakh - 15%

INR 20 Lakh - 10%

Property evaluation charges

Approximately INR 7,500
(Note - property evaluation charges are subject to change, they may vary depending on one’s location and property)

Moratorium period*

Course duration + 6 months

Repayment tenure

15 years

Check Your Education Loan Eligibility

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How to Pay Your Education Loan in SBI?

Repaying your SBI education loan is easy and flexible. The secret to a stress-free process is knowing your options for repayment. This is a simple how-to guide to help you be informed and ready to repay your SBI education loan.

1. Equated Monthly Installments (EMIs)

Once your studies are over, you will begin making monthly installment payments, or EMIs, to pay back your loan. For a variety of education loan programs, SBI lets you spread out the repayment of your loan over a maximum of 15 years. The principal and interest will be included in your EMI, providing a straightforward method of paying off your loan over time.

2. Moratorium Period: Interest Payment Options

SBI provides a grace period for its student loans. There is a grace period during which EMI payments are not required. It extends for the length of your course plus an extra six to twelve months, allowing you time to secure employment.

3. Paying Interest During the Moratorium

The interest that accrues during your study period and moratorium may be paid, though it is not required. By paying off this interest sooner rather than later, you can lower your EMI amount because, after the moratorium, your payments will only be based on the principal.

 

Learn about your options for funding higher education with SBI. Watch our video to see how you can easily secure an education loan!

 

 

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What are the Ways to Pay Your SBI Education Loan?

Understanding that each borrower has different needs and financial circumstances, SBI provides a range of repayment options that are optimised for ease and effectiveness. Irrespective of your inclination towards contemporary digital solutions or the dependability of conventional approaches, SBI guarantees a seamless loan repayment experience customised to suit your needs.

Online Payment

SBI offers an online loan repayment portal. The EMI can be transferred straight from your savings or current account to your loan account using SBI's net banking service.

  • list items Log in to your SBI net banking account.
  • list items Navigate to the ‘Transfers’ section and select your education loan account.
  • list items Enter the EMI amount and confirm the payment.

Automatic Payment

  • list items National Automated Clearing House (NACH): A feature that enables debtors to automatically deduct their installment payments from their bank accounts. NACH is efficient because it doesn't require human intervention to guarantee on-time payments.
  • list items Electronic Clearance Services (ECS): Like NACH, ECS enables smooth EMI withdrawals from the borrower's bank account, offering a dependable and automatic means of meeting loan obligations.
  • list items e-NACH (Electronic National Automated Clearing House): e-NACH is a system that improves on the conventional NACH system by introducing a digital mandate system that makes setting up automatic payments easier. This online authorization that works without paper can be easily set up through your bank, making it a convenient and environmentally friendly way to start and manage your loan repayments.

These automated methods ensure timely payments without the need to remember due dates, offering a worry-free repayment experience.

Manual Payment

Every month, you can also manually pay your bills at any SBI branch by cheque or cash deposit. When making the payment, be sure to include your loan account number accurately.

SBI YONO App: If you have an SBI account, you can pay your student loan with the YONO app. The loan management and payment interface offered by the app is easy to use.

  • list items Download the SBI YONO app and log in.
  • list items Navigate to the ‘Loans’ section and select your education loan.
  • list items Follow the prompts to make the payment.

 

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Benefits of Starting your Loan Repayment Early at SBI

Paying off your loan or starting your EMIs during the moratorium period can significantly reduce the total interest accrued, offering substantial savings. Additionally, under Section 80E of the Income Tax Act, you can avail tax benefits for the interest paid on your education loan, further reducing your financial burden. Let us understand some additional benefits of repaying your education loan early at SBI.
 

Benefit Description

Interest Reduction

Reduces overall interest, leading to significant savings.

Loan Tenure Reduction

Shortens loan tenure, freeing borrowers from debt sooner and enhancing financial flexibility.

Financial Discipline

Builds financial responsibility, aiding in future budgeting and financial management.

Decreasing Repayment Pressure

Eases financial transition post-graduation by reducing debt burden early.

Improved Credit Score

Timely repayments boost credit score, improving eligibility for future loans.

Tax Benefits

Offers tax deductions on interest paid, providing financial relief during early career stages.

Also Know: Disbursement process of SBI education loan
 

Repaying an SBI education loan is a journey that requires careful planning, methodical execution, and knowledge of your options. Borrowers can achieve financial independence and fulfill their educational goals without jeopardizing their financial security by following the instructions provided in this extensive guide.

Even though the SBI's extensive loan services offer a solid foundation for funding your higher education, sorting through the countless details of loan repayment can still be challenging. At this point, GyanDhan becomes an indispensable ally in helping you make informed decisions regarding your student loan. Serving as a guiding light for students navigating the financial intricacies of pursuing higher education, we make sure that their journey is prosperous and long-lasting.

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Frequently Asked Questions

Can I switch my SBI education loan repayment option?
 

Yes, under certain restrictions, SBI permits borrowers to modify their repayment plans.

Are there any tax benefits available on SBI education loan repayment?
 

Yes, you can claim the interest paid on your education loan under Section 80E of the Income Tax Act.

How can I pay my SBI education loan?
 

The best repayment method is by making EMI payment that will be automatically debited from the SBI account, you designate at the end of the monthly cycle.

Can I repay SBI education loan early?
 

The repayment period at SBI starts after one year after the course ends or six months post-employment, depending on whatever happens first. You are required to make monthly payments equal to the EMI amount. Nonetheless, you have the option to pay an amount greater than the EMI without incurring any prepayment fees.

Can I prepay my SBI education loan without any additional charges?
 

There are no prepayment penalties for borrowers who choose to pay back their education loans early with SBI. This may be a calculated move to reduce interest expenses for the loan.

What happens if I fail to pay an EMI on my SBI education loan?
 

Missing an EMI payment can affect your credit score negatively. However, SBI may offer a grace period or restructuring options depending on your circumstances. It’s best to contact the bank proactively if you foresee difficulties in making payments.

How can I track my SBI education loan repayment schedule?
 

Borrowers can use the YONO app or SBI's net banking portal to monitor their loan repayment schedule. The bank also sends out periodic statements that include information on the remaining balance and repayment status.

Check Your Education Loan Eligibility


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