Education Loan EMI Calculator

`
%
Months

EMI Result

Loan Amount: ` 1,00,00,000
Rate of Interest: 11%
Tenure: 240 months
EMI: `

The education loan EMI Calculator by Paisabazaar is an online tool that can help you, as a prospective education loan applicant to calculate the EMI accrued on your education loan, otherwise known as the Equated Monthly Installments. The conventional way to accomplish this task would be to use the EMI formula and spend a considerable amount of time calculating. But the same task can be completed much faster and more accurately using the online EMI calculator known as the Paisabazaar education loan repayment calculator.

Benefits of using the Education Loan EMI Calculator

  • Quick Results – Applicants can easily use the this calculator to calculate the EMIs that they will be liable to pay for the pre-determined tenure and interest rate that the education loans are offered, in mere seconds.
  • Simplicity – The calculations using this EMI calculator are based on the applicant providing three key bits of information i.e. the principal amount of the loan, the applicable rate of interest and the loan tenure.
  • Varying Combinations – With the educational loan EMI calculator, you can easily input different interest rates and tenures to look for a combination that will allow you to easily repay the principal amount, without putting undue pressure on your finances.
  • Free Usage – The Paisabazaar’s education loan EMI calculator is a user friendly education loan calculator that is available to everyone free of charge and is easy to use.
     

How to Use the Paisabazaar Education Loan EMI Calculator? 

The interface of the Paisabazaar’s education loan EMI calculator has been designed to offer utmost efficiency with maximum simplicity. This EMI calculator is user friendly, saves time and is highly scalable. To calculate EMI for your education loan, you just need to enter the following details:

  • The principal amount of the loan – In the first section of the education loan EMI calculator, you need to update the total loan amount that you wish to apply for in case of your education loan.
  • The applicable rate of interest – In the second section, you need to enter the interest rate that is applicable to your educational loan.
  • The tenure of the loan – Similar to the previous steps, you need to enter the tenure that you would wish to choose for your education loan to get the EMI amount payable by you.
     

Steps to use Paisabazaar’s Education Loan Calculator:

Step 1: Enter the principal amount for education loan that you wish to borrow from the lender.

Step 2: In the next section, you need to input the interest rate that has been offered to you for the education loan.

Step 3: In the last section, you will have to enter the loan tenure that you would like opt for. The tenure for an education loan can vary from 5 to 7 years, but with the number of flexible repayment options available, applicants can also opt for longer repayment periods, that can go up to 15 years.

On the right side of the sliders, you should be able to see the education loan EMI that you are liable to pay with the given combination of loan principal, tenure, and rate of interest. The EMI will of course vary as you tend to change the contributing factors of the education loan EMI calculator. You can easily alter these factors and see the changes in the EMI payable that are visible on the right side of the page.

Things to Consider for an Education Loan

The Processing Fee: Most banks ask for an additional fee as processing charges for the education loan. This fee has to be submitted along with the loan application, and has to be provided by the applicant or the co-applicant. This fee can be as low as 1 % of the principal amount, or it is possible that there would be none applicable. It is always a good idea to confirm the processing fee from your lending bank, or from the associated loan documents. Results obtained from the education loan EMI calculator do not take the processing fees into account.

Prepayments of Education Loan: Even though the repayment period of an education loan does not begin immediately after loan disbursement (educational loans mostly feature a moratorium period of up to 1 year after completion of the course for which), there are a number of prepayment options available. The most common is of course prepaying the loan or a part of the loan after the EMIs have begun, but with educational loans, students also have the option to keep paying interest on the principal amount before the EMIs are due to begin. This helps in considerably reducing the EMIs or the tenure of the loan repayment cycle.

Customize Your Education Loan with EMI Calculator

The ability to easily customize the details that you enter in the educational loan EMI calculator is a feature that is offered by Paisabazaar. Once you calculate the EMI for your education loan, you can furnish various values for the fields that are to be entered; this includes the loan tenure, the rate of interest applicable on the education loan, as well as the principal amount you would like to opt for. This feature provides the applicant with the freedom to experiment with the loan options, which in turn helps them in understanding the various configurations available to them. This way, applicants can easily opt for options that would suit them the best, and would not place undue pressure on them when it comes to repayment of the loan. The best part of this education loan calculator is that it is available freely for everyone.

Calculate EMIs for an Education Loan Easily with Paisabazaar

Paisabazaar has been providing the most comprehensive resource for all of your banking and financial concerns, be it opening saving accounts, or applying for credit cards, or applying for loans. A premier site for comparing various banking products, Paisabazaar leaves no stone unturned in helping prospective loan applicants make informed decisions regarding their education loan. The educational loan calculator has been designed to provide simplicity and accessibility. This helps people overcome the tediousness of calculating their education loan EMI by hand. The information related to all the products is also kept completely up to date, ensuring that the visitors to the site get only the latest information.

Importance of Education Loans in India

The cost of education in India, as well as abroad, has been increasing with each passing year. Financing a child’s education independently is becoming more and more difficult owing to these inflated costs. That is why there has been an inherent increase in the demand for education loans in India, to help cover the expenses of a higher education. Answering this demand for education loans in India, a number of banks have placed themselves as contenders to become the leading education loan provider. The premise of an educational loan in India covers a wide range of graduate and post graduate courses, as well as doctoral and professional degrees and courses.

The quantum of expenses that is covered by an educational loan in India covers direct expenses like tuition fees, registration fees, examination fees, etc., as well as allied expenses like those for uniforms, travelling expenses, laptops (if required), lab equipment charges, etc. However ensure that you use an education loan EMI calculator to figure out your pay outs ahead of time.

Education Loan EMI

EMIs for educational loans can be broadly classified as the EMI paid during the loan disbursal or the EMI paid back after getting the loan.

Pre-EMI: Pre-EMIs are the payments that are made towards the interest component of the education loan which is disbursed in parts.

For example: If you education loan has a principle amount of Rs.5 lakhs and the bank is disbursing the loan in installments of Rs.1 lakh each at every stage that you pay the fees applicable on your studies, at the disbursal of the first installment i.e.Rs.1 lakh, you, as the borrower can begin making interest payments. Pre-EMIs are solely for the interest applicable, and do not reduce the principal component of the loan. Even if the loan is disbursed at once, students do not have to repay the loan till after the completion of their course, but can begin making interest payments right after the disbursement of the loan.

Advantages of Pre-EMIs

  • The actual EMIs, when they begin, will be of a lesser amount.
  • This method provides an economical alternative to paying the whole EMI i.e. interest + principal amount, and the pre-EMI payments will be lower as they comprise only of interest.
     

Full EMI: Here, the EMI i.e. the interest + principal is paid only once after the entire loan amount has been disbursed, and the student has completed the course for which they had taken the education loan (these loans also feature a moratorium period of 1 year or till the applicant has gained regular employment).

Advantages of Full EMIs

  • No payments to be made until the entire loan is disbursed, the course completed, and gainful employment has been obtained by the primary applicant.
  • The rebates on income tax are higher. This is due to the higher EMI payments that are made as compared to the various Pre-EMI options.
  • The total loan amount begins reducing from the very first EMI, since the payments that are made go towards reducing the principal amount.
     

Disadvantages of Full EMIs

The EMI will remain the same throughout the loan term. Therefore using an EMI calculator is of vital importance in this case as it would help you calculate the value of each individual payout required to pay off the education loan. Higher EMIs will have to be paid in case of full EMI as compared to the Pre-EMI option. This will result in lower disposable income.

Features and Benefits of Education Loans:

  • An education loan can be taken out by an applicant for studying in India or even abroad
  • The parent or the guardian of the student needs to be a co-applicant for the loan application
  • If the education loan applied for, is up to a certain amount (generally 7.5 lakhs), there is no security or collateral that the applicant needs to put up for the loan. However, above the stated amount, a security, that can be a fixed deposit or property that needs to be put up as collateral.
  • The maximum limit for an educational loan varies with each bank and financial institution; however, the loan amount is usually capped at Rs. 10 lakh for studies within India, and at Rs. 20 lakh for studying abroad.
  • Normally, the tenure applicable to your loan is of 5 to 7 years, but with the number of flexible repayment options that are available, applicants can also opt for longer repayment periods, that can go up to 10 to 15 years. Use the free online education loan EMI calculator available on Paisabazaar to figure out the loan tenure that works best for you.
  • The education loan EMI for a loan does not begin immediately or during the course period. They also feature a moratorium period of 1 year or till the applicant has gained regular employment.
  • The interest on the education loan amount is eligible for tax rebate under Section 80E of the Tax Act.
     

Things to Consider before Selecting Educational Loans

  • Loan interest rates:The applicable interest rate is probably one of the most important aspects of education loans, as it determines the education loan EMI that one needs to pay in lieu of paying off the borrowed amount. Use the free online education loan EMI calculator available on Paisabazaar to gauge your repayment requirement. There is a lot of competition among various banks for offering loans, and due to this, the market rates that will be offered when you get an education loan will be more or less similar in case of most banks. However, being a comparatively longer term repayment loan, even a small difference in interest rate can end up helping you save some money on the repaid loan amount. The offered interest rate also depends on the study destination of the student (whether it is India, or abroad), the course applied for, as well as the loan tenure and loan amount. Using an online education loan EMI calculator, you can easily determine your savings when comparing loan options with different tenures and interest rates.

 

Another important aspect of the interest rate is confirming whether the education loan is being offered at a fixed rate or a floating interest rate. As a rule, floating interest rates are a little cheaper as compared to fixed rates, and a majority of loans that are available are offered with a floating rate of interest have longer repayment periods. Use an online EMI calculator to determine your interest payouts. Some banks also offer the option of making interest payments right after disbursement of the loan, which is also a good option, as it can help reduce the burden of repayments later. Just make sure that you consider the bank’s interest payment calculations, whether it is calculated at a daily reducing balance, or on a quarterly reducing balance.

 

  • Calculate your education loan EMI:The education loan EMI is probably the most important factor that an aspiring borrower needs to consider before taking education loans in India. Using an EMI calculator is the best way to determine if the EMI payouts on a specific loan are feasible or not. The main borrower in an education loan is the student himself, and the installments for a loan will be paid back after the student completes their studies. So it is very important that the monthly education loan EMI should not place a burden on the student, who is in most probability, just beginning his career, herein, the education loan EMI calculator plays a vital role. The education loan EMI depends on a number of factors like the tenure, the total loan amount, and the interest rate.
     

Another factor, that plays a key role in case the borrower wishes to make prepayment on education loan, is that the ratio of the loan amount and the interest being paid back changes throughout the loan tenure. The ratio of the interest in the education loan EMI is more at the beginning of repayments, and keeps reducing with time. The exact details of these payout components are found in the loan amortization schedule.

One more feature of education loans is that, right after the disbursement of the loan, students can begin paying the interest, even before the education loan EMI begins. Keeping all these in mind, it is always a good idea to calculate loan EMIs, using an online EMI calculator, before choosing a specific education loan provider’s offer.

 

  • Bank’s Services: taking a loan is a financial matter that can include a rather large sum of money. Make sure that you know about the service features of the bank you choose. You can either opt for banks with which you have already had a previous experience or choose a new lender that provides a better offer. Also check with the bank’s branch networks and their online capabilities to ensure that any future issues are dealt with swiftly.

 

  • Processing Fee: Mostly, education loans offered by different banks, do not have any applicable processing fee, but a number of banks in their individual capacities may ask for a certain percentage of the principal amount of the loan as processing fee. As these fees vary from one lender to another, the education loan EMI calculator does not take into account these fees when computing the results. Hence, it is important that you should check for any processing fee, especially if it seems like the bank in question is offering interest rates that are considerably lower than other banks.
     

Why to Choose Paisabazaar for Applying Educational Loan?

Paisabazaar is not just a portal that offers people the option compare different education loan options. It is in fact a user friendly portal that assists prospective clients in understanding the nitty-gritty of different financial products. The website is dedicated to providing an accurate comparison of the various available banking products that include education loans. Additionally, you can use the free education loan EMI calculator to figure out With Paisabazaar, visitors can better understand the products that they are looking for, and also make informed decisions, by choosing the options that are best suited to them. Additionally you can find tools like the EMI calculator to determine loan repayment amounts and schedules.  Apart from this, there are a few additional reasons why Paisabazaar forms the best option when applying for educational loans:

  • Hassle-free applications – Applicants can save a lot of time as well as effort as they no longer have to do the legwork that is generally required with respect to a loan application. Now they just need a computer and an internet connection to browse through the number of education loan options, use the EMI calculator to find out the EMI amount and select the best option without any hassles, from the comfort of their own homes.
  • Comparison – As mentioned above, Paisabazaar will list for you the various education loans that are on offer by various banks and financial institutions as well as lenders in India. The comparison option will let you look at the available loan options, including rates of interest, processing fees, foreclosure fees that are charged by the various institutions. This way you can easily select a loan that will suit your requirements as well as your limitations.
  • Education loan repayment calculator - Paisabazaar also offers you the chance to calculate the EMI applicable to your loan. The website has an easy to use free education loan EMI calculator for India, using which you can easily calculate the monthly payouts for an education loan, making sure that you make a well informed decision regarding your loan requirement.
  • Online applications – Once you have gone through the comparisons, you can easily and immediately apply for the option that you choose through the Paisabazaar portal. This option makes it very easy to go from collecting information to applying for a loan.
  • Information availability – It is a fact that loans applications require some work in order to get sanctioned. This could include checking the eligibility for a particular loan, or checking the documents that need to be submitted with the loan application, covering the basic terms and conditions of the loans. Through the help of Paisabazaar you can easily access all the information that could be required for an educational loan application. This includes all information, like applicable fees, the eligibility criteria, an EMI calculator to calculate your EMI payments, documentation required, terms and conditions, interest rates, latest news, etc.
  • Personalised support – Whenever you have a query or a concern that you need answered, you can simply get in touch with the Paisabazaar customer support, which is available through a phone call, online chat, or email.
     

Top Banks that Offer Education Loans in India:

In India, almost all of the leading private sector and public sector banks have various education loan schemes in place that are offered to eligible and deserving borrowers. Out of the numerous banks that offer education loans to students for the purpose of pursuing higher studies, whether in India or abroad, some of the leading banks (in no particular order) are listed as follows:

How do Banks Calculate EMI for Education Loans

An EMI is short for the Equated Monthly Installment. This amount is a pre- upon and fixed amount that must be paid every month by the loan applicant to repay the entire loan amount and the applicable interest payout. The EMI amount is made up of two parts, namely the applicable interest and the principal amount. The ratio of each part keeps varying as you progress along the loan tenure. It is very simple to use an education loan EMI calculator to calculate your monthly payouts however you can also manually calculate your education loan EMI using the following formula:

EMI = [P x R x (1 + R) ^ n] / [(1 + R) ^ n - 1]

To calculate loan EMIs, you need to know the following abbreviations:

P = Principal loan amount

R = Rate of interest applicable

N = Number of installments (or the loan tenure, in months)

As is clear from the above formula, calculating the loan EMIs is a complicated and time consuming process. That is why there are a number of online tools available and you can easily use an EMI calculator for education loans to ensure that you choose a repayment plan that is best suited to you.

The rate of interest applicable varies from bank to bank and is based on a number of factors like the tenure and the principle amount. Female students can also avail an additional discount of 0.5 % on the rate that is offered to the male applicants. Generally the interest rate for educational loans is a percentage (usually around 1.5 % to 2.5 %, termed as spread) that is added on the existing MCLR (marginal cost of lending rate). Accordingly, the interest rates applicable on education loans can start from a low percentage of 11.25 % of the principle amount.

Number of installments: can be decided by the applicant based on their total principle amount as well. The maximum tenure can go up to 7 years, or in case of flexible repayment options, can go up to 10 – 15 years in case of sufficiently high loan principals.

Frequently Asked Questions (FAQs):

  1. What is an EMI?

Ans: EMI is the acronym for Equated Monthly Installment, an EMI amount is the agreed upon fixed amount for monthly repayments that the borrower of the education loan must pay to the lender in order to pay out the money borrowed. The EMI consists of two parts – the applicable interest and the principle amount.

  1. If I do not use the educational loan calculator, how can I calculate the applicable EMIs by myself?

Ans: The equation to calculate the applicable EMI for an educational loan is:

EMI = [P x R x (1 + R) ^ n] / [(1 + R) ^ n - 1].

Where,

P= Principal loan amount,

R= Applicable rate of interest, and

n= Number of monthly installments.

The manual calculation of the EMI is a quite complicated; it is time consuming and can also be rather monotonous. But with the Paisabazaar education loan EMI calculator, the entire process can be completed in mere seconds.

  1. What must an applicant do if they are not sure about the applicable processing fee? Does it affect the EMI?

Ans: You can confirm the processing fee applicable to your education loan by checking out the documents that accompany the loan application. When you compare the various education loan options of Paisabazaar, you can easily find the applicable loan rates on the list. The processing fee is generally supposed to be paid along with the loan application however you can opt for the amount to be added to your EMI payments in some cases.

  1. On using the Paisabazaar’s loan EMI calculator, will I be bombarded with ads or promotional messages offering different types of products?

Ans: No. Paisabazaar offers its education loan EMI calculator as a helpful tool to assist the customers in making well informed decisions with regard to their loans. This tool is not a proxy to offer promotions or offers and is offered free of cost to all users.

  1. Can the Paisabazaar EMI calculator be used for the calculation of EMIs for education loans that are offered by non-Indian financial entities?

Ans: The tool is not hardcoded with pre-determined inputs. The calculations performed by the tool are based on the inputs that you yourself provide. The formula used in the calculation is a universal formula and remain the same for all EMI calculation. The only issue that you might face is in entering the maximum loan amount and applicable tenure, as the tool maxes out at Rs. 25 lakh as loan principal and 10 years as loan tenure.