Education Loan + Moratorium
Last updated: September 2026.
Balance when EMI starts
₹14,31,405
Accrued in moratorium ₹4,31,405
Monthly EMI after
₹23,030
× 84 months · total interest ₹9,34,519
If you serviced interest
₹5,83,037 saved
EMI would be ₹16,089
This table provides a year-by-year breakdown of your loan amortization schedule over the loan tenure.
How to use this calculator
- Enter loan amount, rate, course (moratorium) months and repayment tenure.
- See interest accrued during study, EMI after, and total cost.
- Compare paying interest during moratorium vs letting it compound.
What is this tool?
An education loan funds your course with a moratorium — no EMI during study. This calculator shows how interest grows during the moratorium, your EMI after, and how much paying interest early saves. Use it before accepting any study loan offer.
What lenders don't tell you (education loans)
Moratorium interest usually compounds — a 4-year course can add ~35–40% to what you repay on. Paying just the interest during study kills most of that growth.
Section 80E lets you deduct the full interest (no upper limit) for 8 years — only interest, not principal. EWS families under Rs. 4.5L income should also ask about the CSIS full-interest subsidy during moratorium.
Floating education loans carry zero prepayment charges since January 2026. No collateral needed up to Rs. 7.5 lakh in most bank schemes.
Read the full Real Loan & EMI Guide →
This tool gives an estimate for guidance only. It is not financial advice. Confirm rates with your bank or RBI before deciding.
Common education-loan questions
What is a moratorium period?
Course duration plus 6–12 months after, during which you may skip EMI. Interest still accrues — usually compounded — unless you service it.
Is education loan interest tax-free?
Interest paid is fully deductible under Section 80E for 8 assessment years, with no cap. Principal repayment gets no deduction.
What if I can't get a job after the course?
Talk to the bank before defaulting — restructuring and extended moratorium exist. Defaults destroy the CIBIL you'll need for every future loan.
Worked example: ₹10 lakh at 10%, 4-year course + 1 year moratorium
- If no interest is paid during the 5-year moratorium, about ₹5 lakh of simple interest is added, making the loan ≈ ₹15 lakh.
- EMI on ₹15 lakh at 10% for 10 years = ₹19,823 a month.
- Paying only the monthly interest (about ₹8,300) during study keeps the loan at ₹10 lakh, cutting the EMI to about ₹13,215.
How the Education loan calculator works: the rules
- Interest paid on an education loan can be deducted from income for up to 8 years (old regime; Section 80E of the 1961 Act, carried into the 2025 Act).
- PM Vidyalaxmi offers collateral-free, guarantor-free loans for students admitted to top-ranked institutions, with a government guarantee on part of the loan and interest subvention for lower-income families.
- Most banks need no collateral for loans up to ₹7.5 lakh under the Credit Guarantee Fund for Education Loans.
Education loan calculator: frequently asked questions
What is the moratorium period?
The course duration plus 6–12 months, during which you need not pay EMIs, though interest keeps adding.
Can I claim tax benefit on education loan interest?
Yes, under the old regime the full interest paid is deductible for up to 8 years.
What is PM Vidyalaxmi?
A central scheme for collateral-free education loans to students at top-ranked institutions, applied through the Vidyalaxmi portal.
Is collateral needed for an education loan?
Usually not for loans up to ₹7.5 lakh; above that, banks may ask for collateral.
Does paying interest during study help?
Yes, it stops interest from being added to the loan and lowers your EMI later.
Can I get an education loan for studying abroad?
Yes, most banks offer them, often with collateral for larger amounts.
Official sources: PM Vidyalaxmi portal· Income Tax Department· Last reviewed 2026-10-30. Results are estimates — confirm final figures with your lender, insurer or tax adviser.