23-year-old trying to pay off a ₹3.12 lakh education loan ASAP looking for advice
Hi everyone,
I'm 23 years old and recently graduated. I'm currently working in a tier-2 city in India and earning ₹20,000 per month.
Here's my loan situation:
* Original education loan: ₹3,00,000
* Total loan amount after interest during my 4-year degree: approximately ₹3,70,000
* Interest rate: 10.55% p.a.
* Amount repaid so far: around ₹60,000
* Current outstanding loan balance: ₹3,12,000
* Current monthly payment: ₹15,000
My goal is to become debt-free as quickly as possible, so I've been putting ₹15,000 (75% of my salary) toward the loan every month. That leaves me with only about ₹5,000 for all other expenses.
I live in a tier-2 city, so my expenses are relatively low, and I'm managing for now. However, I'm wondering whether this is the smartest approach.
Some questions I have:
- Should I continue paying ₹15,000 per month, or is there a better repayment strategy?
- Would making lump-sum prepayments whenever I get bonuses or extra income make a significant difference?
- Should I focus more on increasing my income through upskilling, switching jobs, freelancing, etc., rather than aggressively paying down the loan?
- At 10.55% interest, should I prioritize loan repayment over investing?
My primary goal is financial freedom and clearing this debt as soon as possible. I'd appreciate any advice, especially from people who paid off their education loans early.
Thanks!