Private College Student Loan

How the interest of the education loan is paid?

I heard that Banks will charge interest from the same month of the loan(Education Loan) sanctioned and the borrower has to pay it from the same month. Is that true?

Public Comments

1. Usually it starts when you graduate.
2. Yes , banks will charge interest from the very day they have given money. They will charge interest on the amount they have given. If the loan is released in three instalments , then interest on second and third instalments will not be charged from the first day , but from the days on which those instalments were released.The charged interest need not be paid by the borrower till the 'holiday period' or 'moratorium' (for interest) is over.There may be different moratoriums for principal and interest. Sometimes Bank does not allow any moratorium for interest. In that case interest has to be paid from the first month itself. It is necessary to ascertain the stipulated manner of payment while availing first instalment of loan. Banks do not compond interest on housing loans till end of the moratorium period.