Education loans, moratoriums, EMIs and prepayment, worked through in real numbers. When to repay early, when not to, and how debt shapes career choices.
What this topic answers
The questions we are working through, in your words.
- What does my moratorium really cost?
- Should I prepay or invest?
- How does debt affect my career choices?
- What happens if I cannot pay?
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Work it through
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What will this loan really cost me, and what does paying extra save?
Terms to know
From the money glossary.
- EMI
- Equated monthly instalment: a fixed monthly payment that covers interest and repays part of the loan. Early EMIs are mostly interest; later ones are mostly repayment.
- Moratorium
- A period, common in education loans, when repayments have not yet begun. Interest usually still accrues; whether you pay it as you go or it is added to the loan changes the total cost.
- Prepayment
- Paying off part of a loan early. It reduces the interest you pay overall; check whether your lender charges for it and whether it shortens the tenure or lowers the EMI.
- Fixed and floating rates
- A fixed rate stays the same for a set period; a floating rate moves with a benchmark, so your EMI or tenure can change. Read which one you have, and how it is reset.
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