Loans & Debt · Before Taking a Loan
Education Loan Calculator — Moratorium Interest, EMI, Subsidy & Tax Saving
Plan a student loan the way banks run it: the money is paid out at once or year by year, interest runs during the course and the grace period (moratorium) and is added to the loan unless you pay it as you go, and EMIs start afterwards. Includes the CSIS and PM Vidyalaxmi interest subsidies and the old-regime deduction on education-loan interest.
Also listed inEducation
Your inputs
Quick start — try a typical case
₹ 15 lakh
Banks usually release the loan in stages as fees fall due, so interest runs only on what's been paid out.
Most banks: course + 1 year before EMIs start (some end it 6 months after you get a job).
Public-sector banks charge simple interest during the moratorium; some lenders compound it.
Up to 15 years after the moratorium at most banks.
CSIS pays all moratorium interest on up to ₹7.5 lakh; PM Vidyalaxmi pays 3 % on up to ₹10 lakh (quality institutions). Both cover the course + 1 year.
Your result Live
EMI After the Moratorium
₹25,863
For 10 years, starting after 5 years (course + grace)
- Interest Built Up Before EMIs Start
- ₹4,98,750 — added to the loan
- Loan When Repayment Starts
- ₹19,98,750
- Total Interest
- ₹16,03,600
- Total Repaid
- ₹31,03,600
- If You Paid the Interest While Studying
- EMI would be ₹19,410 — the loan wouldn't grow by ₹4,98,750
- Amount borrowed · 48%₹15,00,000
- Moratorium interest · 16%₹4,98,750
- Interest in EMIs · 36%₹11,04,850
Year by year
15 rowsRates, moratorium length and whether interest compounds differ by lender — check your sanction letter.
How this is calculated
Moratorium interest = Σ (amount paid out × r) each month · Loan at repayment = amount + unpaid interest · EMI = P·r·(1+r)ⁿ ÷ ((1+r)ⁿ − 1)
- r
- Monthly rate (yearly ÷ 12)
- n
- Number of EMIs in the repayment period
An education loan has two stages. During the course and the grace period after it (the moratorium) you don't pay EMIs, but interest runs on the money paid out so far. Unless you pay that interest as you go, it's added to the loan when repayment begins — which is why paying even the interest while studying lowers the EMI. CSIS (for family income up to ₹4.5 lakh) and PM Vidyalaxmi (up to ₹8 lakh) pay some or all of the moratorium interest. In the old tax regime, all the interest you pay is deductible for 8 years.
Assumptions & sources
- Tranches are equal and paid at the start of each course year.
- Fixed interest rate throughout.
- The 8-year deduction is approximated from the first 96 months in which you pay interest.
- 1Education loan — most important terms and conditions (moratorium: course + 1 year, simple interest during moratorium, repayment up to 15 years) — State Bank of India
- 2PM Vidyalaxmi scheme guidelines — 3 % interest subvention during the moratorium on loans up to ₹10 lakh, family income up to ₹8 lakh — Ministry of Education, Government of India
- 3Central Sector Interest Subsidy (CSIS) under PM-USP — full moratorium interest on loans up to ₹7.5 lakh, family income up to ₹4.5 lakh — Punjab & Sind Bank (scheme guidelines)
- 4Deduction for interest on a loan for higher education (Section 80E of the Income-tax Act, 1961; continued in the Income-tax Act, 2025) — Income Tax Department
Calculator ID LOAN-EDU-001 · version 1.0.0
Common questions
Is interest charged during the moratorium?
Yes. Interest runs on the amount paid out during the course and grace period; if you don't pay it, it's added to the loan when EMIs start.
Should I pay interest during the course?
If you can, yes — it stops the loan growing, so the EMI and total interest are lower. Some banks also offer a small rate concession for it.
How much tax can I save on an education loan?
Under the old regime, all the interest you pay in a year is deductible, for up to 8 years, with no upper limit. At the 30 % slab that's about 31 % of the interest. It isn't available in the new regime.