Guides / Education Loan Guide: Moratorium, EMI and Total Cost

Education Loan Guide: Moratorium, EMI and Total Cost

Education loans often let you start paying EMIs after the course. But interest does not stop during that time.

Example: ₹20 lakh at 10.5%, 4-year course, 10 years to repay

The calculation assumes the full amount is disbursed at the start and the interest is added to the loan. In reality, loans are often paid out in parts, so your numbers may be lower. Run yours in the Education Loan EMI Calculator.

Paying interest during the course

If you pay the ₹8.4 lakh of course-period interest as it builds up, your EMI on ₹20 lakh over 10 years is about ₹26,987, nearly ₹11,300 less each month.

Tips

1. Ask whether interest is simple or compounded during the moratorium.
2. Check whether the rate is fixed or floating.
3. Look for any collateral or co-applicant requirements.
4. Interest on an education loan can be deductible under the old tax regime. Check the current rules.
5. Borrow only what you need, and compare lenders.