Education Loan Calculator
Education loans have a moratorium: interest is charged during the course and a grace period, but EMIs start only afterwards. Enter your loan details to see how the moratorium interest adds up and what your EMI will be.
Results
Monthly EMI
₹36,943.00
- Interest during moratorium
- ₹8,55,000
- Balance when EMIs start
- ₹28,55,000
- Total interest
- ₹24,33,160
- Total payment
- ₹44,33,160
EMI starts after 4 years, 6 months and is ₹36,943.00 for 10 years. Total interest is ₹24,33,160.32.
Principal vs interest
- Principal₹20,00,000 (45.1%)
- Total interest₹24,33,160 (54.9%)
Show the calculation steps
- Moratorium = course 4 years + grace 6 months = 4 years, 6 months.
- Simple interest during the moratorium = P × rate × months ÷ 12 = ₹20,00,000.00 × 9.5% × 54 ÷ 12 = ₹8,55,000.00.
- The interest is added to the loan: balance at repayment start = ₹20,00,000.00 + ₹8,55,000.00 = ₹28,55,000.00.
- EMI = B × r × (1 + r)^n ÷ ((1 + r)^n − 1) with B = ₹28,55,000.00, r = 0.007917, n = 120 → ₹36,943.00.
- Total interest = moratorium interest ₹8,55,000.00 + EMI-period interest ₹15,78,160.32 = ₹24,33,160.32.
- Assumes the whole loan is disbursed at the start. Real education loans are often disbursed in stages, which lowers the interest accrued during the course.
What is the moratorium?
The moratorium is the period, usually the course plus six to twelve months, during which you are not required to pay EMIs. Interest is still charged, and you either pay it as simple interest each month or it builds up and is added to the loan when repayment starts.
Paying the interest during the course keeps the balance from growing, which lowers the EMI and the total cost.
What raises the cost of an education loan?
The bigger the moratorium and the higher the rate, the more interest accrues before you have earned anything. Repayment tenure also matters, as with any loan:
- Longer courses mean more months of accrued interest.
- Capitalising interest increases the loan you then repay with interest.
- A longer repayment period lowers the EMI but raises total interest.
Tax benefits
In India, interest paid on an education loan may be deductible under Section 80E without an upper limit for up to eight years, subject to conditions. Check the current rules.
Formula
Moratorium interest = P × rate × months ÷ 12 (simple interest)
Balance at start = P + moratorium interest (if capitalised)
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
Where:
- P
- = Loan amount
- rate
- = Annual interest rate (%)
- months
- = Course duration + grace period, in months
- r, n
- = Monthly rate and number of EMIs after the moratorium
Example calculation
₹20 lakh loan at 9.5%, 4-year course, 6 months grace, 10 years repayment
Inputs
- Loan Amount
- ₹20,00,000
- Interest Rate
- 9.5 %
- Course Duration
- 4 years
- Extra Grace Period
- 6 months
- Moratorium Interest
- Add it to the loan (accrued, simple interest)
- Repayment Period
- 10 years
Result
- Monthly EMI
- ₹36,943.00
- Interest during moratorium
- ₹8,55,000
- Balance when EMIs start
- ₹28,55,000
- Total interest
- ₹24,33,160
- Total payment
- ₹44,33,160
Step-by-step
- Moratorium = course 4 years + grace 6 months = 4 years, 6 months.
- Simple interest during the moratorium = P × rate × months ÷ 12 = ₹20,00,000.00 × 9.5% × 54 ÷ 12 = ₹8,55,000.00.
- The interest is added to the loan: balance at repayment start = ₹20,00,000.00 + ₹8,55,000.00 = ₹28,55,000.00.
- EMI = B × r × (1 + r)^n ÷ ((1 + r)^n − 1) with B = ₹28,55,000.00, r = 0.007917, n = 120 → ₹36,943.00.
- Total interest = moratorium interest ₹8,55,000.00 + EMI-period interest ₹15,78,160.32 = ₹24,33,160.32.
Important notes
- Assumes the full loan is disbursed at the start of the course. In practice loans are often disbursed in stages.
- Processing fees and insurance are not included.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
Do I pay interest during my course?
Interest is charged from disbursal. You may be allowed to pay it monthly during the course (simple interest), or it accrues and is added to the loan when repayment begins.
Is the moratorium interest compounded?
Terms differ by lender. This calculator uses simple interest during the moratorium and then adds it to the loan if you choose to capitalise it.
How can I lower my education loan cost?
Pay the interest during the course if you can, make prepayments once you start earning, and choose the shortest repayment period that your salary supports.
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