₹15 lakh, 9.5%, 4-year course, 6 months grace, 10-year repayment
Interest builds to ₹6,41,250, so you start repaying ₹21,41,250. EMI ₹27,707 and total repaid ₹33.25 lakh.
Education loan EMI calculator
Simple interest builds up through the course and moratorium, which most banks charge. If you choose to pay it, you pay only the interest each month. The repayment EMI is a normal reducing-balance one. Collateral, processing fees and rate changes are not included.
15 lakh
%
years
months
years
During the moratorium
EMI after the moratorium
₹27,707
Interest of ₹6,41,250 builds up over 54 months, so you start repaying ₹21,41,250.
- Total interest
- ₹18,24,870
- Total repaid
- ₹33,24,870
- Balance when EMIs start
- ₹21,41,250
Interest on an education loan can be claimed under Section 80E for up to 8 years in the old regime.
How an education loan grows before you repay it
Most students think of the loan as the amount the bank paid out. In truth, the balance you start repaying can be 20% to 40% higher, because interest builds through the course and the grace period.
Say you borrow ₹15 lakh at 9.5% for a 4-year course with a 6-month grace period. That is 54 months of interest, about ₹6.41 lakh on a simple basis, so you begin repayment with ₹21.41 lakh owed. Over 10 years the EMI is about ₹27,707, and you repay ₹33.25 lakh in total, so ₹18.25 lakh of interest on a ₹15 lakh loan.
Paying interest during the course changes this a lot. The simple interest on ₹15 lakh at 9.5% is ₹11,875 a month. If a family or part-time job can cover that, the balance stays at ₹15 lakh and the later EMI is far lower.
Check three things when you compare banks: the rate and whether it floats, any collateral demanded above ₹7.5 lakh, and the processing fee. Many public-sector banks charge nothing for loans below ₹7.5 lakh. And claim the section 80E deduction once repayment starts.
Sources
What this calculator does not account for
- Interest subsidy schemes.
- Processing fees and collateral costs.
- Rate changes during the course.
How this is calculated
Formula: Simple interest during study, then EMI
balance at start =loan + loan × rate × (course + grace) ÷ 12; then EMI on that balanceWhat the symbols mean
- courseMonths of study, usually 12 per year.
- graceMoratorium after the course, often 6 to 12 months.
Good to know
- If you pay the interest during the course, the balance does not grow.
- The EMI part is the same formula as in the loan EMI calculator.
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Worked examples
Each example is worked out by the same code as the calculator above.
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<iframe src="/embed/education-loan-emi-calculator" title="Education loan EMI" width="100%" height="720" style="border:0;max-width:42rem" loading="lazy"></iframe>Questions
Do I pay anything while studying?
Many banks let you pay nothing until the moratorium ends, but interest keeps building. Paying only the interest during the course keeps the loan from growing.
Is education loan interest tax deductible?
Yes. Interest on a loan for higher education is deductible under section 80E with no upper limit, for up to 8 years from when repayment starts.
Which scheme covers poorer families?
The Central Sector Interest Subsidy scheme can cover interest during the moratorium for eligible students. See PM-Vidyalaxmi and the Vidya Lakshmi portal.
What is the moratorium?
The course period plus a grace of 6 to 12 months after it, during which you need not pay EMIs.