Education Loan Calculator
Calculate education loan EMI with moratorium period, interest subsidy & affordability check.
Loan Details
Loan Details
💡 Tips for Your Situation
- Consider paying interest during study: Even ₹3,958/month can save you ₹86K in total interest.
📖 How Education Loan EMI Calculator Works
Our education loan calculator helps you understand the true cost of your education loan before you sign any documents. Unlike simple EMI calculators, we factor in the moratorium period — the time during your studies when interest accumulates but you don't pay EMIs.
Enter Loan Details
Loan amount, interest rate, and course duration
See Moratorium Impact
How much interest adds up during your study period
Check Affordability
Whether your expected salary can handle the EMI
⚠️ Important: Many students don't realize that a ₹10 lakh loan can become ₹12-13 lakhs before they pay their first EMI — due to moratorium interest capitalization!
📐 Education Loan Calculation Formulas
1. EMI (Equated Monthly Installment) Formula
EMI = [P × R × (1+R)^N] / [(1+R)^N - 1]
Where:
- P = Principal amount (loan + capitalized interest)
- R = Monthly interest rate (Annual Rate / 12 / 100)
- N = Repayment tenure in months
Example: ₹10,00,000 loan at 9% for 10 years
R = 9/12/100 = 0.0075, N = 120 months
EMI = ₹12,668 per month
2. Moratorium Interest Calculation
Interest During Moratorium = P × R × Moratorium Months
New Principal = Original Loan + Moratorium Interest
Example: ₹10L loan, 9% rate, 4-year course + 6-month grace
Moratorium = 54 months
Simple Interest = 10,00,000 × 0.09 × 4.5 = ₹4,05,000
New Principal = ₹14,05,000
Impact: Your loan increased by 40% before you started paying!
3. EMI-to-Salary Ratio (Affordability)
EMI Ratio = (Monthly EMI / Take-home Salary) × 100
Safe Zones:
- ✅ Safe: EMI ≤ 25% of salary
- ⚠️ Caution: EMI 25-35% of salary
- ❌ Risky: EMI > 40% of salary
Example: ₹12,668 EMI on ₹40,000 salary
Ratio = 31.7% — Caution zone
4. Section 80E Tax Benefit
Tax Saved = Interest Paid × Your Tax Rate
Key Points:
- Only interest is deductible (not principal)
- No upper limit on deduction amount
- Available for 8 years from start of repayment
- Can be claimed by student or parent (whoever repays)
Example: ₹1.2L interest paid, 30% tax bracket
Tax Saved = ₹1,20,000 × 0.30 = ₹36,000/year
5. Break-even Period (ROI Check)
Break-even Years = Total Loan Cost / Annual Salary Increase
What it means: How long until your education "pays for itself"
Example: MBA costs ₹20L total, increases salary by ₹4L/year
Break-even = 20L / 4L = 5 years
Good ROI: Break-even in 3-5 years is considered worthwhile
❓ Frequently Asked Questions
What is moratorium period in education loan?▼
Moratorium period is the time during which you don't have to pay EMIs. It typically includes:
- Course Duration: Your entire study period (2-5 years)
- Grace Period: 6-12 months after course completion
⚠️ Critical: Interest continues to accrue during moratorium! If you don't pay it, it gets added to your principal (capitalized), increasing your total loan amount.
Example: 4-year BTech + 6 months grace = 54 months moratorium
Should I pay interest during moratorium?▼
Yes, if you can! Paying interest during moratorium has significant benefits:
- ✅ Principal stays at original amount (no capitalization)
- ✅ EMI after graduation is much lower
- ✅ Total interest paid over loan life is significantly less
- ✅ Can save ₹2-5 lakhs on a ₹10L loan
Comparison (₹10L loan at 9%):
- Without paying: New principal = ₹14L, EMI = ₹17,700
- With paying interest: Principal = ₹10L, EMI = ₹12,668
Savings: ₹5,000/month lower EMI for 10 years = ₹6 lakhs!
How much education loan can I get without collateral?▼
Collateral-free limits in India:
- Public Sector Banks (SBI, BOB): Up to ₹7.5 lakhs
- Private Banks (HDFC, ICICI): Up to ₹7.5 lakhs
- NBFCs (Avanse, Credila): Up to ₹20-40 lakhs (based on profile)
For loans above ₹7.5 lakhs:
- Collateral required (property, FD, insurance)
- Third-party guarantee may be accepted
- NBFCs may offer higher limits without collateral for top institutions
Pro Tip: IIT/IIM/AIIMS students often get higher unsecured limits
Which bank offers the lowest education loan interest rate?▼
Current Rate Ranges (2025):
- SBI Scholar Loan: 8.5% - 10.5%
- Bank of Baroda: 8.4% - 10.45%
- Canara Bank: 8.5% - 10.5%
- HDFC Credila: 10% - 13%
- ICICI Bank: 10.5% - 13.5%
- Avanse: 11% - 15%
Note: Rates vary based on loan amount, collateral, course, and institution
Tip: Public sector banks offer 0.5% concession for female students
What tax benefits can I get on education loan?▼
Section 80E Deduction:
- Deduct entire interest paid (no upper limit)
- Available for 8 consecutive years from repayment start
- Only interest is deductible, not principal
- Loan must be for higher education
Who can claim:
- Student (if they're repaying)
- Parent (if they're the borrower/co-borrower)
Example Savings:
₹1.5L interest × 30% tax rate = ₹45,000 tax saved per year
Tip: Keep all interest certificates from bank for ITR filing
How is education loan for abroad studies different?▼
Key Differences:
- Higher Limits: ₹20L - ₹1.5Cr (vs ₹10L for India)
- Currency: Disbursed in foreign currency to avoid forex fluctuation
- Collateral: Usually required for loans above ₹7.5L
- Interest: Slightly higher (1-2% more)
- Processing: Longer approval times (2-4 weeks)
What's Covered:
- Tuition fees
- Living expenses
- Travel costs
- Books and equipment
- Health insurance
Pro Tip: Apply 3-4 months before course starts for smooth processing
What happens if I don't get a job after graduation?▼
Options available:
- Extended Moratorium: Some banks offer 6-12 months additional grace
- Restructuring: Extend tenure to reduce EMI
- Interest-only EMI: Pay only interest for first 1-2 years
- Income-contingent: Some NBFCs offer flexible repayment based on income
What to do:
- ✅ Inform bank immediately — don't default silently
- ✅ Request written restructuring agreement
- ✅ Negotiate lower rate if possible
- ❌ Don't ignore calls/letters — affects CIBIL score
Warning: Missing 3+ EMIs is classified as NPA and severely damages credit score
Should I prepay my education loan early?▼
Yes, prepayment is usually beneficial:
- ✅ No prepayment penalty on floating rate loans (RBI rule)
- ✅ Saves significant interest (especially in early years)
- ✅ Become debt-free faster
- ✅ Improves loan eligibility for future needs (home, car)
When NOT to prepay:
- If loan rate is very low (< 8%) and you can invest at higher returns
- If you haven't built emergency fund yet
- If you're losing Section 80E tax benefit value
Strategy: Prepay in first 3-5 years for maximum interest savings
Who should be the co-applicant for education loan?▼
Co-applicant is mandatory for education loans. Options:
- Parent (most common): Either parent can be co-applicant
- Spouse: If married
- Sibling: Some banks accept earning siblings
- Guardian: For orphaned students
Co-applicant implications:
- Equally liable for the entire loan amount
- Loan appears in their CIBIL record too
- May affect their future borrowing capacity
- Can claim tax benefit if they're repaying
Important: Discuss this responsibility openly with family before applying
💡 Smart Tips Before Taking Education Loan
✅ Do This
- • Compare at least 3-4 lenders before deciding
- • Check processing fees, insurance charges
- • Ask about interest subsidy schemes (CSIS for EWS)
- • Try to pay interest during moratorium
- • Keep EMI under 30% of expected salary
- • Factor in job market conditions
❌ Avoid This
- • Don't ignore moratorium interest impact
- • Don't assume you'll get your dream salary
- • Don't skip reading fine print
- • Don't take maximum eligible amount
- • Don't compare only interest rates (check total cost)
- • Don't forget to explore scholarships first
📚 Want to Learn More?
Read our comprehensive guide on education loan interest and moratorium
Disclaimer: This calculator provides estimates for educational purposes only. Actual loan terms, interest rates, and eligibility may vary. Please consult with your bank for accurate loan details.