Education Loan EMI Calculator
Find out your estimated monthly education loan EMI in seconds using our free online Education Loan EMI Calculator.
How the Education Loan EMI Calculator Works
Similar to any other loan, the bank uses a standard reducing-balance method to calculate your EMI based on your principal, interest rate, and repayment tenure.
However, an education loan has a major structural difference. You do not start paying your EMI on day one. Because you are in college, the bank gives you a moratorium period, which is your course duration plus an additional 6 to 12 months to find a job. The Education Loan EMI Calculator shows you the EMI for the repayment phase that begins after the grace period ends.
What Changes Your Education Loan EMI?
Three factors determine your monthly expenses once you begin earning
Loan Amount
This is not only the cost of tuition but also the total cost of your education, which may involve boarding charges, examination fees, library fees, and even a small stipend for basic expenses.
Interest Rate
Due to your lack of income and collateral when applying for a student loan, the interest rate charged is somewhat higher than that of a standard housing loan.
Repayment Period
The repayment period of education loans is relatively longer than that of other loans, generally ranging from 10 to 15 years. A longer tenure keeps your initial EMI low when your entry-level salary is modest, but it increases the total interest you pay over the years.
The Moratorium
Period Trap
Here is where most students get caught off guard. Just because you are not paying an EMI during your college years does not mean interest is not accumulating.
Depending on your bank, interest might quietly pile up during those 3 to 4 years of college. When your repayment phase finally starts, some banks add all the accumulated interest directly to your principal.
"Always ask your bank whether they charge simple interest during the moratorium or if they compound it. The calculator above gives you the EMI for the final principal amount, so make sure you know exactly what that final number will be."
Tax Benefits on
Loan Interest
This is the biggest financial relief for student borrowers. Under Section 80E of the Income Tax Act, you can claim a deduction for the entire interest you pay on your education loan.
There is no upper cap on this deduction. You can claim it for up to 8 consecutive years, starting from the year you begin making your EMI payments.
FAQs.
Frequently asked answered questions.
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