How is education loan EMI calculated with a moratorium?

During the moratorium (course period plus a grace period), you usually pay no EMI, but interest still accrues on the loan. If unpaid, that interest is added to the principal at the end of the moratorium, and the EMI is then calculated on this higher amount over the repayment tenure.

What is the Section 80E tax benefit?

Under Section 80E, the entire interest paid on an education loan is deductible from your taxable income, with no upper limit, for up to 8 years starting from the year you begin repayment. Only the interest qualifies, not the principal.

Should I pay interest during the study period?

Servicing the interest during the moratorium prevents it from being added to the principal, which lowers your later EMI and total cost. Many banks also offer a small interest concession if you do.

Education Loan EMI Calculator (India)

Education Loan EMI Calculator

Education loans have a moratorium — the study years plus a grace period — during which no EMI is paid but interest quietly builds up. This tool shows the interest that accrues during the moratorium, your EMI once repayment starts, and the total cost, so there are no surprises.

How it's calculated

During the moratorium — your course duration plus a grace period of six months to a year — interest accrues on the loan but no EMI is due. If you don't service that interest, it is added to the principal when repayment begins. The EMI is then calculated on this larger amount over your repayment tenure. This calculator assumes the moratorium interest is capitalised (not paid during study), which is the more expensive, cautious case.

Moratorium interest here is simple interest (loan × rate × moratorium years), added once to the principal. Servicing interest during study avoids this and lowers your EMI. Under Section 80E, the full interest is tax-deductible for up to 8 years — with no cap.

Frequently asked questions

Is there a tax benefit on an education loan?

Yes — Section 80E lets you deduct the entire interest paid, with no upper limit, for up to 8 years from when repayment starts. The principal isn't deductible.

Can I reduce the total cost?

Pay the interest during the study period so it isn't added to the principal, and prepay whenever you can once repayment begins. Both cut the total interest meaningfully.

Do education loans need collateral?

Smaller loans are often collateral-free; larger loans (typically above ₹7.5 lakh) may need collateral or a co-applicant. Policies vary by lender and course.

Education Loan EMI Calculator

Your education loan

How it's calculated

Frequently asked questions