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Taking an education loan is an investment in your future but it's equally important to understand the repayment structure and moratorium period.
Simply put, a moratorium is a repayment holiday. But it’s important to remember that interest continues to accrue during this time, and your choices during the moratorium will impact the total cost of your loan.
This guide explains:
- Education loan moratorium rules in India
- Repayment options for domestic, abroad, coaching, and upskilling loans
- Propelld’s flexible policies (including foreclosure rules) that reduce stress for students and families
Education Loan Repayment Timeline Explained
When you take an education loan, repayment usually follows three phases:
Note: Moratorium = EMI holiday, not interest holiday.
Payment During Moratorium
Many students assume “no repayment” means “no responsibility.” In reality, interest keeps accumulating during the moratorium. Propelld gives you the option to pay only the interest during the moratorium period.
- Cover 100% of the accruing interest during study + moratorium.
- The principal remains unchanged.
- Significantly reduces future EMIs.
- Best suited for: Students whose parents/guardians can support interest payments.
How Propelld Makes Repayment Flexible?
Unlike banks and traditional NBFCs, Propelld focuses on student-first repayment policies.
1. Custom Moratorium Lengths
- Aligned with course duration. So, you pay interest during the course duration and full payment starts after the course.
2. Option to Prepay Anytime
- Propelld allows foreclosure or prepayment.
- Charges: Typically 2–4% (as per loan agreement).
- Waiver Policy: In most cases, especially for strong profiles or genuine hardships (e.g., medical emergency, financial stress), charges are waived off.
- Even small prepayments during study reduce EMIs significantly. However, the prepayment amount must be equivalent to at least 2 full EMIs.
3. Special Provisions for Long Courses
- MBBS and other long-duration programs get customized repayment timelines.
- However, students need to pay interest during the course, and the schedule is generated during disbursal.
Key Takeaways
- Moratorium = EMI holiday, not interest holiday.
- Choose repayment mode: Partial interest, or full interest (only for abroad loans). Full interest to be paid for domestic loans.
- Propelld offers custom moratoriums for MBA, MBBS, coaching, and upskilling.
- Foreclosure charges (0-2%) apply as per agreement but are often waived in special cases based on profile.
Small prepayments = big savings in the long run.
