Model the course-plus-grace moratorium, choose how interest is treated while you study, and see your post-study EMI with §80E tax-saving context. All rates and figures are indicative. Your inputs stay on this device.
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During the moratorium (course duration + grace) you usually do not pay EMIs. If interest is added to the loan, the post-study EMI is computed on the grown principal; the repayment EMI uses the standard monthly-reducing-balance formula on the principal at start of repayment (P′), annual rate (R) and repayment months (N):
EMI = P′ · r · (1+r)^N ÷ ((1+r)^N − 1), r = R ÷ 12 ÷ 100Results are indicative estimates based on the inputs you entered and the assumptions above. Actual interest rate, EMI, eligibility, prepayment charges and tax benefits are determined by the lender and applicable law at the time of disbursal. Tarsariya Financial Services LLP is a financial-services intermediary and not a lender. For a personalized assessment, please reach out to our advisor.
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Education loans give you a moratorium — the course duration plus a grace period (usually 6–12 months) after you finish — during which you normally do not pay EMIs. Once the moratorium ends, repayment starts and the EMI is calculated with the standard monthly-reducing-balance formula on the principal at that point, your annual interest rate and the repayment tenure in months. Interest is charged only on the outstanding balance each month.
Under Section 80E of the Income Tax Act, the entire interest you pay on an education loan is deductible from your taxable income with no upper limit. The deduction is available for a maximum of 8 years starting from the year your repayment begins, or until the interest is fully repaid, whichever is earlier. Only interest qualifies — the principal does not — and your saving is the interest paid multiplied by your income-tax slab.
If you add (capitalise) simple interest to the principal during the moratorium, you pay nothing while studying but your loan grows, so the post-study EMI and total cost are higher. If you service the interest monthly during the moratorium, you pay a small amount each month while studying, the principal stays the same, and your post-study EMI and overall interest are lower. Servicing interest is cheaper if you can afford the monthly outgo; capitalising is easier on cash flow during the course.
You may be eligible for government support such as the Central Sector Interest Subsidy (CSIS), which can cover the interest during the moratorium for students from economically weaker sections studying in India at approved institutions. Many lenders also accept applications through the Vidyalakshmi portal, a single window for education loans and subsidy schemes. Eligibility depends on income limits, the course and the institution; any subsidy is applied by the lender and is not included in the estimate above.
It is an indicative estimate. Your real EMI depends on the interest rate the lender offers for your course and profile, the exact moratorium and repayment tenure sanctioned, how interest is treated during the moratorium, and any subsidy you qualify for. We confirm the final numbers with you before you commit.
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