If pursuing a higher degree abroad, it’s financing demands meticulous planning. A part of this procedure is to understand how to fund this substantial expense overseas. Availing an education loan on a property meets this financial obligation.
Now as you repay the loan via its EMIs, a portion of it pays off the principal while the other portion compensates your interest. This proportion of your repayment involving principal versus interest changes every month and this process of payment is known as amortization. Although you can use your lender’s education loan calculator to know the exact portion of your payment, it’s smart on your part to understand precisely how this interest is calculated.
Concept of Mortgage Amortisation
When one avails a mortgage loan, the lending authority determines the payable interest based on the amortization schedule. Amortisation is a method to reduce an installment loan debt until it touches zero. This takes into account both the payments – the loan balance and the payable interest. The amortization table lists the amount of principal and the interest in each EMI over the entire repayment period. It also includes the total sum and interest paid to date in a simple-to-follow convenient format.
Factors Determining The Payable Interest Amount
Here are the factors that affect your interest payments –
- Education loan Interest Rates
This is the rate at which your lender charges you interest on your student loan in India.
- Amount Borrowed
Higher the borrowed loan amount, the greater will be payable interest.
- Outstanding Loan Amount
As one gradually pays off the borrowed sum, he/she will be paying the interest on a lower sum, and the interest payments slowly fall.
- Loan Tenure
Your repayment tenure affects your payable interest amount. Thus, paying off your loan over a short tenure minimizes your interest although it conversely increases the EMIs.
Information Required For Calculation
To calculate the interest expense on an education loan, you can use your lender’s education loan calculator. But, before that, you need to know the essential details to understand the procedure better.
Firstly, you must be aware of the loan tenure available with a lender. For instance, if you avail a Loan against Property for Education from Bajaj Finserv, you can enjoy flexible repayment tenures of up to 20 years. You can also part-prepay or foreclose the loan at your convenience and foreclose it with no extra charge.
Secondly, you need to know the loan amount you are eligible for as well as the respective interest rates. You can avail loan amounts of up to Rs. 1 Crore as a salaried individual and Rs. 3.5 Crore if you are a self-employed individual.
You can easily qualify for a loan against property by meeting these simple eligibility criteria required by Bajaj Finserv to help borrowers.
Bajaj Finserv also provides pre-approved offers that make procuring loans quick and hassle-free. These pre-approved offers are applicable on unsecured credits like personal loans, business loans and secured advances such as home loans among numerous other financial products. You can check out your pre-approved offer by sharing a few necessary details like your name and contact number.
Lastly, you must be aware of your EMI meet the repayments on time.
How To Calculate The Payable Interest On An Education Loan On Property?
You can calculate your monthly EMIs with the help of an education loan calculator. Fill in the details such as the rate of interest, tenure and the total loan amount to calculate your EMIs accurately. Some lenders additionally provide the amortization online to help you further plan your finances with an aim towards part prepayments as well.
With this knowledge of interest calculation on an education loan calculator, you’ll have a clear idea of how the interests are calculated. Apart from this, you must also know the list of documents needed to apply for a loan against property. This will equip you with all the necessary information about procuring education loan on the property and reduces the chances of loan rejection and unnecessary hassles.