When does the repayment for my education loan for studying abroad typically start?
Your education loan repayment usually starts 6 to 12 months after you finish your course, once the moratorium period ends. For example, SBI's Global Ed-Vantage scheme begins EMIs 6 months after course completion, though interest keeps accruing on your loan throughout your entire study period regardless of the moratorium.
You do not need to start repaying your education loan while you are still studying abroad. Most Indian lenders give you a moratorium that covers your entire course plus a further holiday period after you graduate, and only then do regular EMIs begin.
Typical Moratorium And Repayment Start By Lender
| Lender Or Scheme | Moratorium After Course Ends | When EMI Typically Starts |
|---|---|---|
| SBI Global Ed-Vantage | 6 months | 6 months after course completion |
| SBI Student Loan Scheme | Up to 1 year | Around 12 months after course completion |
| Indian Bank IBA Scheme | Up to 1 year holiday period | After the course period plus the holiday period |
What Happens To Interest During The Moratorium
- Interest still accrues: even though you are not paying EMIs during your studies
- Capitalisation risk: unpaid interest is usually added to your principal, which raises your final EMI
- Servicing interest early: paying just the interest during your studies avoids this increase
- Prepayment: most lenders allow early repayment or foreclosure without penalty
- Tax benefit: interest paid on an education loan is eligible for a deduction under Section 80E for up to 8 years
My Advice
If your family can manage it, pay the interest portion during your studies rather than letting it accumulate, since this meaningfully lowers your EMI once regular repayment starts. Ask your lender for the exact moratorium length in writing before you sign, since it genuinely varies between schemes.
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