Last Updated on May 27, 2022 by Aradhana Gotur

Education loans are your best bet when you or your child wants to pursue higher education, and the tuition fee looks like an insurmountable peak. Education loans provide a source of finance so that you or your child can avail of a quality education without breaking the bank. 

That being said, you cannot ignore the associated interest cost on the loan. Like other loans, education loans too charge a rate of interest on the amount that you borrow. 

Though you can claim a tax exemption on the interest paid under Section 80E, student loan repayment is still an expense that reduces your disposable income. Moreover, the tax exemption is provided up to a maximum of 8 yrs only. 

That is why it is prudent to repay education loan faster so that you can free yourself from the debt burden and also enjoy tax exemptions up to the allowed period.

If you have an education loan, here are 7 ways in which you can repay it faster:

1. Start early

This is a no-brainer. When you start the student loan repayment early on, you can pay it off faster. So, get a side job or a hustle and start earning even when you are studying. Use the generated income to repay education loan.

Pro tip: If your side job doesn’t pay an income to equal the loan EMI, ask your parents for help. They might supplement your income to help you with your student loan repayment.

2. Choose a shorter repayment tenure

The longer the repayment tenure, the longer it takes for you to repay education loan. So, instead of choosing longer tenures, choose shorter ones. Loans with a limited tenure would be paid off quickly, saving on the interest costs.

Pro tip: Remember, choosing a shorter repayment tenure would mean a higher EMI. So, before going for a shorter tenure, see if you can afford the EMIs. Moreover, the tax benefit would also stop as soon as the repayment tenure is over.

3. Defer non-emergent expenses

Try cutting down on unnecessary expenses so that you can save up to repay education loan quicker. If you have non-emergent expenses, postpone them. For instance, if your old laptop is getting worn down, but you can defer buying a new one, defer it. The money that you save can be used to reduce your debt burden. 

4. Prepay

Prepayment is a facility that many lenders allow. Prepayment means paying off a part of the loan in a lump sum, over and above the EMI. Prepayment allows you to reduce the outstanding amount of the loan so that the loan is repaid quickly. So, if you have lump sum funds at your disposal, use them to prepay the loan.

Pro tip: Loan prepayment can be done partially or fully. Partial prepayment means paying off a part of the outstanding loan amount. Full prepayment, on the other hand, means paying off the full balance of the loan earlier than scheduled. Depending on the funds that you have, you can choose partial or full prepayment. However, lenders might levy a change of such prepayment. So, pay heed to the charges when choosing to prepay the loan.

5. Step-up EMIs

Stepping up the EMIs means increasing the EMI amount periodically. You can talk to the lender and opt to step up the EMIs automatically (like once every year or two years). As the EMIs increase, the loan would be paid off faster. 

6. Refinance 

You can refinance your education loan, i.e., opt for another loan to pay off the outstanding balance of the loan. Refinancing works if you find a lower interest rate on the existing loan, and/or you can negotiate better repayment terms with another lender. When you refinance, you can reduce the loan costs and also repay education loan quickly. 

Pro tip: Before you opt to refinance the loan, keep in mind that such refinancing would involve additional processing fee. This fee is payable for getting the new loan. However, if you save up on the interest rate considerably and can even pay off the loan faster, refinancing would be a good idea.

7. Take the help of your employer

Many employers help their employees with their education loans. So, you can talk to your employer and ask it to extend financial help so that you can pay off the loan quicker. If your employer agrees, it might contribute to the loan EMIs so that you can increase the repayment amount and pay off the loan faster. Alternatively, your employer might allow you lump sum funds to pay off the loan completely and be free of the debt. 

Pro tip: If your employer extends financial help with student loan repayment, they may have you sign a legal contract with respect to attrition. You might have to agree to work for a minimum number of years to repay the employer’s favour. So, understand the fine print if your employer is ready to help you with the loan.


An education loan can help you get the education that you or your child has dreamed of. It is affordable and is also available across most banks. While education loans allow long repayment tenures, you can use the aforementioned tips to repay education loan quickly and save on the interest costs. So, use what works to your advantage and pay off your loan faster.

Aradhana Gotur
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