An education loan (student loan) has a unique structure: a moratorium period during which you don't pay EMIs — the course duration plus a 6–12 month grace period after graduation. Interest accrues during this moratorium and is either capitalized (added to principal) or paid as simple interest monthl...
After course ends
Max 15 years (after moratorium)
Total moratorium: 36 months (2yr course + 12mo grace)
Simple interest/month: ₹7,500 · Total moratorium payments: ₹2,70,000
CAPITALIZE EMI
₹13,273
Total: ₹23.89 L
PAY INTEREST EMI
₹10,143
Total: ₹20.96 L
CAPITALIZE EMI
₹13,273/mo
Total: ₹23.89 L
PAY INTEREST EMI
₹10,143/mo
Total: ₹20.96 L
✓ Save ₹2.93 L by paying ₹7,500/mo during the 36-month moratorium
Moratorium payments: ₹2.70 L → Principal stays ₹10.00 L instead of growing to ₹13.09 L
PRINCIPAL AT REPAYMENT START
BALANCE REDUCTION (CAPITALIZE SCENARIO)
📋 Section 80E: Save ~₹35,333/yr in tax (capitalize) or ₹27,000/yr (pay interest)
Entire interest deductible from taxable income · Old regime only · Up to 8 years
Reducing balance · Moratorium interest compounds monthly
Enter the loan amount, interest rate (use the bank presets for current rates), course duration in years, and the moratorium grace period (typically 6 or 12 months after course completion).
Set the repayment tenure (up to 15 years after moratorium). The calculator shows two scenarios: Capitalize (let interest accrue during moratorium, added to principal) vs Pay Simple Interest (pay monthly interest during moratorium, keeping the principal unchanged).
The comparison shows the capitalized principal at repayment start, the resulting EMI, total interest paid, and total cost for both options — so you can see exactly how much the moratorium strategy affects your total loan cost.
Enter your tax slab to see the Section 80E tax benefit — the entire interest paid on an education loan is deductible from taxable income for up to 8 years of repayment (old tax regime only, no upper limit).
Arjun takes a Rs 10,00,000 education loan at 9% for a 2-year course + 12 months moratorium = 36 months total moratorium. Option A (Capitalize): Rs 10L grows to Rs 13,08,645 at repayment start. EMI over 15 years: Rs 13,273/month. Total repayment: Rs 23,89,167. Option B (Pay simple interest at Rs 7,500/month during 36mo moratorium): Principal stays Rs 10L. EMI: Rs 10,143/month. Total cost: Rs 7,500×36 + Rs 18,25,681 = Rs 20,95,681. Saving by paying simple interest: Rs 2,93,486. Section 80E: at 30% tax slab, first year interest ~Rs 90,000 → tax saving Rs 27,000.
| BANK | RATE FROM | EMI/MONTH | TOTAL INTEREST | MORATORIUM | TYPE |
|---|---|---|---|---|---|
| SBI | 8.15% | ₹9,643 | ₹7.36 L | Course + 12mo | PSU |
| Bank of Baroda | 9% | ₹10,143 | ₹8.26 L | Course + 12mo | PSU |
| Bank of India | 9.5% | ₹10,442 | ₹8.80 L | Course + 12mo | PSU |
| HDFC Bank | 10.5% | ₹11,054 | ₹9.90 L | Course + 12mo | Private |
| ICICI Bank | 10.5% | ₹11,054 | ₹9.90 L | Course + 12mo | Private |
| NBFC (Avg) | 12.5% | ₹12,325 | ₹12.19 L | Varies | NBFC |
Rates as of April 2026 · Indicative, subject to credit profile · ₹10L loan, 15yr repayment, no moratorium shown · SBI concession: 1% off if interest paid during moratorium
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Formula: EMI = P×r×(1+r)^n/((1+r)^n−1) · Capitalization: P grows monthly at r/12 during moratorium · Section 80E: full interest deduction, old regime, up to 8 years · Rates as of April 2026 · Last updated: 29 April 2026 · Eagle-eyed accuracy for every calculation.