Education and Career Forum

Hi everyone, I was searching for an education loan scheme for studying BCA(H) course. After searching I thought that applying an education loan from Oriental Bank of Commerce is fine for me as I have an account in this bank. But I am unable to understand the prepayment fine. Can I know about this particular term?

Prepayment fine or prepayment penalty is a charge that a borrower may have to pay to the bank or financial institution if they repay the education loan before the stipulated loan tenure. This fee is charged to compensate the bank or financial institution for the loss of interest income that they would have earned if the borrower had continued to pay the loan EMIs for the entire tenure.

As per the Oriental Bank of Commerce Education Loan scheme, there is no prepayment penalty if the loan is repaid before the due date. In fact, borrowers are encouraged to prepay their loan to reduce their overall interest burden.

However, it is always advisable to read the loan agreement and understand the terms and conditions before signing up for any education loan scheme. This will help avoid any surprises or additional charges that may be levied by the bank or financial institution.