Education Loan Calculator
Key takeaways
- During the 24-month moratorium, ₹1.90 L of simple interest accrues — EMIs are then computed on ₹11.90 L, not the ₹10.00 L borrowed.
- Total interest across both phases is ₹6.34 L — repaying the ₹10.00 L loan costs ₹16.34 L in all.
- With a 12-month moratorium instead of 24, the EMI would be ₹1,552.68 lower and total interest ₹1.30 L less.
Payment schedule
Months 1–24 are the moratorium: interest accrues but no EMI is due. At month 24 that accrued interest capitalises into the principal in one step — the balance jumps there, before any EMI is paid.
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | ₹0 | ₹95,000 | ₹10.00 L |
| 2 | ₹0 | ₹95,000 | ₹11.90 L |
| 3 | ₹1.26 L | ₹1.08 L | ₹10.64 L |
| 4 | ₹1.38 L | ₹95,192 | ₹9.26 L |
| 5 | ₹1.52 L | ₹81,476 | ₹7.74 L |
| 6 | ₹1.67 L | ₹66,398 | ₹6.07 L |
About the Education Loan Calculator
An education loan usually comes with a moratorium — the course duration plus a grace period, often 6 to 12 months after it ends — during which no EMI is due. Interest keeps accruing throughout that window regardless. This calculator models the common scheme in which the moratorium interest is charged as simple interest on the original principal and then capitalised into the principal in one step the moment the moratorium ends.
The EMI that follows is calculated on that larger, post-capitalisation balance, not on the amount disbursed. "Total interest" adds the moratorium interest to the interest paid during repayment; "Total payment" is everything actually paid, which equals EMI × repayment months because nothing is paid during the moratorium itself.
Banks do not all handle the moratorium identically. Some capitalise monthly or quarterly instead of once at the end, which compounds slightly more than this model; some require the interest to be serviced during the moratorium rather than deferred. Confirm the exact scheme with your lender — this calculator states one common, clearly-defined model rather than every bank's fine print.
Frequently asked questions
What is a moratorium on an education loan?
It is the period during which no EMI is due — typically the course duration plus a grace period of 6 to 12 months after it ends, so repayment does not begin while the borrower is still studying or job-hunting. Interest accrues during it either way.
What does "capitalised" interest mean here?
The interest that built up during the moratorium is added to the loan principal at the end of it, and the EMI is then computed on that larger balance. At the default figures a ₹10 lakh loan with a 24-month moratorium at 9.5% starts repayment on ₹11.90 lakh, so every later EMI is sized against ₹11.90 lakh.
Can I pay the interest during the moratorium instead?
Many lenders allow it, and some require it. Paying the simple interest as it accrues means nothing is capitalised, so the EMI afterwards is computed on the original principal. This calculator models the fully deferred case; ask your lender which option your sanction carries.
Is education loan interest tax-deductible?
Under Section 80E of the old tax regime, the full interest paid on a loan taken for higher education is deductible for up to eight years from the year repayment begins, with no upper limit on the amount. There is no deduction for the principal, and the new regime does not allow it. (As of FY 2025-26.)
Does the calculator include processing fees or insurance?
No. It computes the moratorium interest, the capitalised principal and the resulting EMI from the four figures entered. Processing fees, credit-life insurance premiums and any margin money you contribute sit outside it; the sanction letter carries those figures.
Disclaimer: This calculator is for information and education only. It is not investment advice and not a recommendation, and it is not a loan offer. The lender decides the actual interest rate, EMI, fees and eligibility, and whether insurance cover is required, and a floating rate can change during the loan. Charges you did not enter are not included. Every figure is computed solely by applying the formula and assumptions stated on this page to the inputs you entered.