Education Loan EMI Calculator

The moratorium is a repayment holiday that runs through your course plus a grace period of typically 6 to 12 months after you finish or land a job. During it you usually pay nothing, or only the interest. If you skip payments entirely, the interest that accrues is added to your principal, so your EMI is higher afterwards. Paying at least the interest during the moratorium keeps the loan from ballooning.

Education loan rates in India are generally around 8% to 13% a year, lower than unsecured personal loans because they are often backed by collateral or a co-applicant and sometimes subsidised. Loans for premier institutes, female students or those with a guarantor can attract lower rates. Enter the rate your bank quotes into the education loan EMI calculator to see the monthly EMI it produces.

Yes. Under Section 80E of the Income Tax Act, the entire interest you pay on an education loan for higher studies is deductible from your taxable income, with no upper limit on the amount. The benefit is available for up to 8 years starting from the year you begin repayment, which effectively lowers the real cost of the loan below the headline interest rate.

Education loans are usually repaid over 5 to 15 years after the moratorium ends, longer than car or personal loans so that a new graduate's EMI stays manageable. A longer tenure lowers the monthly EMI but raises the total interest paid over the life of the loan. Once you are earning, prepaying or shortening the tenure is an effective way to cut the total interest on your student loan.

Under the Indian Banks' Association model education loan scheme, banks generally lend up to about Rs 4 lakh with no collateral and no third-party guarantee, take a guarantor for roughly Rs 4 lakh to Rs 7.5 lakh, and ask for tangible security above that. A central credit guarantee covers a slice of unsecured lending, which is why Rs 7.5 lakh is a common collateral-free ceiling. Limits differ by bank and by institute, so confirm with the lender.

Margin money is the share of the course cost you fund yourself, with the bank lending the rest. Banks typically waive it on smaller loans and then ask for around 5% for study in India and around 15% for study abroad on larger amounts. Scholarships and assistantships are usually allowed to count towards your margin. Enter only the amount actually borrowed into the education loan EMI calculator, not the full course fee.

Beyond tuition, most Indian education loans cover examination, library and laboratory fees, hostel charges, a caution deposit, books and equipment, a laptop where the course requires one, and for overseas study the airfare and travel costs. Some lenders also fund life insurance on the borrower. Ask the bank for its sanction letter breakdown, because anything outside the approved list must come from your own funds.

The government has run interest subsidy schemes for economically weaker students, most notably a central scheme that pays the interest accruing during the moratorium for eligible professional and technical courses below a family income ceiling and a loan ceiling. Eligibility criteria, income limits and the schemes themselves have changed in recent years, so check the current scheme details with your bank and on the Department of Higher Education portal before assuming you qualify.