Student Loan Calculator
Calculate student loan repayments with grace period. Check if payments are affordable based on your expected income.
Enter details and click Calculate
Education Loan Calculator — Plan Your Student Loan Repayment
An education loan calculator helps students and parents estimate monthly repayments after completing a course. Unlike standard loans, education loans include a moratorium (grace) period during which no repayment is required — but interest continues to accrue on the outstanding principal. This calculator accounts for that interest buildup, giving you an accurate picture of what you'll owe when repayment actually begins.
In India, education loans under the IBA Model Education Loan Scheme are offered by all public sector banks at preferential rates. Loans up to ₹7.5 lakhs need no collateral (CGTMSE guaranteed). Loans above ₹7.5 lakhs require collateral and typically carry rates of 8.5%–12.5%. For an ₹8,00,000 education loan at 9% with a 3-year moratorium (course duration 2 years + 6 months), interest accrues during the moratorium, increasing the effective outstanding balance to approximately ₹10,01,200 by the time repayment starts. Repaid over 7 years, the monthly EMI is approximately ₹15,627.
What is an Education Loan?
An education loan (student loan) is a specialized loan designed to finance higher education expenses — tuition fees, living costs, books, and other course-related expenses. Unlike standard loans, education loans include a moratorium (grace) period covering the course duration plus 6–12 months after graduation, during which no repayment is required.
- Under India's IBA Model Education Loan Scheme, loans up to ₹4 lakhs need no collateral, ₹4–7.5 lakhs require a guarantor, and above ₹7.5 lakhs require tangible collateral like property or fixed deposits.
- Interest accrues during the moratorium even if no payments are made — this interest is added to the principal when repayment begins, significantly increasing the total amount owed.
- Section 80E of the Income Tax Act provides a full deduction on education loan interest (no upper limit) for up to 8 consecutive years from the year repayment begins.
- Under the Central Sector Interest Subsidy Scheme (CSIS), students from families with income below ₹4.5 lakhs per year get full interest subsidy during the moratorium — the government pays the interest while you study.
How to Use This Calculator
- Enter the Loan Amount sanctioned or required (e.g., ₹8,00,000).
- Enter the Annual Interest Rate as stated in your loan offer letter (e.g., 9%).
- Enter the Moratorium Period — course duration plus 6–12 months after course completion.
- Set the Repayment Tenure — typically 7–15 years after the moratorium ends.
- Choose whether you will pay interest during the moratorium (this significantly reduces your total cost).
- Click Calculate to see the accrued interest during moratorium and your post-moratorium EMI.
Education Loan Calculation with Moratorium
- (Simple interest typically applies during moratorium)
- Effective principal at repayment start = P + Accrued Interest
- Example: ₹8,00,000 at 9% p.a. | Moratorium: 30 months (2.5 years)
- Accrued interest = 8,00,000 × 0.09 × 2.5 = ₹1,80,000
- Effective principal = ₹9,80,000
- Repayment over 7 years (84 months) at 9%:
- EMI = ₹15,627/month | Total Payment = ₹13,12,668
Key Terms
- Moratorium Period
- The repayment holiday granted during your course plus typically 6–12 months after graduation. During this period, you are not required to make principal payments. However, interest continues to compound on the outstanding balance — which significantly increases the effective loan amount when repayment begins.
- Section 80E Tax Benefit
- Interest paid on education loans qualifies for a full deduction under Section 80E of the Income Tax Act — with no upper limit. This deduction is available for 8 assessment years from the year repayment begins. If you're in the 30% tax bracket and paying ₹90,000 in annual interest, you save ₹27,000 in taxes, effectively reducing your net interest cost.
- Subsidised vs Unsubsidised
- Under the Central Sector Interest Subsidy Scheme (CSIS), students from economically weaker sections (parental income below ₹4.5 lakhs per year) get full interest subsidy during the moratorium period, meaning the government pays the interest while you study. This is a significant benefit — always check eligibility.
- Collateral Requirements
- For loans up to ₹4 lakhs — no collateral required. For ₹4–₹7.5 lakhs — a guarantor is required. Above ₹7.5 lakhs — tangible collateral (property, FD, insurance policy) is typically required. The CGTMSE scheme allows collateral-free loans up to ₹7.5 lakhs through public sector banks.
Tips
- Pay interest during the moratorium if you can — even small monthly interest payments prevent compounding and can save lakhs over the repayment period.
- Claim the Section 80E deduction every year from the first year of repayment — there is no limit on the deduction amount and it applies for 8 years.
- Check eligibility for the Central Sector Interest Subsidy (CSIS) if your family income is below ₹4.5 lakhs — the government pays all interest during the moratorium.
- Compare rates across public sector banks — SBI's Scholar Loan, HDFC Credila, Axis Bank, and Bank of Baroda all have different rate structures and collateral requirements.
- For abroad studies, ensure your loan covers not just tuition but also living expenses, travel, and insurance — these can add 30–50% to the total loan requirement.
- Start part-time work or internships during your course to make at least the interest payments during the moratorium — this builds good credit habits and reduces total loan cost significantly.
Frequently Asked Questions
The moratorium period (grace period) is the time during which no EMI repayment is required — typically the course duration plus 6 months to 1 year after completion or job placement, whichever comes first. During this period, interest continues to accrue on the outstanding loan balance. If not paid, this interest is added to the principal, increasing the amount you'll need to repay when the moratorium ends.
Yes. Under the IBA Model Education Loan Scheme, loans up to ₹4 lakhs require no collateral. For loans between ₹4–₹7.5 lakhs, a third-party guarantor is typically required but no tangible collateral. Above ₹7.5 lakhs, banks require collateral. The CGTMSE scheme covers collateral-free loans up to ₹7.5 lakhs, and some banks have extended collateral-free limits for premier institutions like IITs, IIMs, and top medical colleges.
Section 80E allows you to deduct the entire interest paid on education loans from your taxable income — with no upper limit. This benefit is available for up to 8 consecutive assessment years, starting from the year you begin repayment. The deduction applies only to interest (not principal). For example, if you pay ₹1,20,000 in interest in a year and are in the 30% tax bracket, you save ₹36,000 in income tax. Only the individual (student) can claim this — not the parent unless they took the loan.
If you are unable to repay, contact your bank immediately and explain your situation. Banks can restructure education loans by extending tenure, granting a temporary moratorium extension, or converting to interest-only payments. Defaulting on an education loan severely damages your CIBIL score and your parents' credit (if they are co-borrowers or guarantors). If collateral was pledged, the bank can initiate recovery proceedings against the collateral under SARFAESI Act.
Yes, paying interest during the moratorium is financially beneficial if you can manage it. For an ₹8,00,000 loan at 9%, monthly interest is approximately ₹6,000. Paying this during the 30-month moratorium prevents ₹1,80,000 from being added to your principal, saving you an estimated ₹80,000–₹1,00,000 in additional interest over the repayment period. Even partial interest payments help. Some banks also offer a 1% interest rate concession during the moratorium for consistent interest payment.
For studies in India, most banks sanction up to ₹10–20 lakhs. For abroad studies, amounts up to ₹1–1.5 crore are available with adequate collateral. Under the IBA Model Scheme, the standard maximum is ₹10 lakhs for domestic studies and ₹20 lakhs for overseas education. Private banks and specialised education loan NBFCs like HDFC Credila and Avanse Financial offer higher amounts based on admission to top-ranked institutions.