How is the Interest Calculated on Education Loans?
Last Updated : May 27, 2020, 12:52 p.m.
To find out what could be the result of the fixed rate of interest over your EMIs and how much you end up paying interest for the borrowed education loan, use the Education Loan EMI calculator. The tool allows customers to make their final decision before loan approval. You can calculate the interest payable easily by using the EMI calculator. Read the article and know how to use the tool and what are their benefits.
Benefits of using the Education Loan EMI Calculator
Quick Results: You can easily use the calculator to calculate the Interest that you are liable to pay for the predetermined tenure for the education loans offered to you, in a few seconds.
Simplicity: The calculations made with the EMI calculator are based on three factors: the principal loan amount, the applicable rate of interest and loan tenure.
Different Combinations: With the help of the education loan EMI calculator, you can easily insert interest rates and tenures to look for the different combinations that help you to pay the principal amount without putting any pressure on your finances.
Free Usage: The education loan EMI calculator is a user-friendly tool that is available to everyone for free and is easy to use.
How to use the Education Loan EMI Calculator?
To use the tool, you need to visit the official website of the lender and provide a few details about the loan. And if you wish to pay the interest during the moratorium period as well, you can do so as it will save your interest in EMI payment. See the example below to know how to generate the total payable interest of your education loan.
Suppose you have borrowed INR 13 Lakh at an interest rate of 12.00%. And the bank provides you upto 15 years to pay the loan amount with the interest. To know what is the payable interest for 15 years, you can use an EMI calculator which generates your monthly EMI i.e. INR 18,003. The yearly interest payable over the borrowed amount would be as mentioned in the table below.
| Tenure | Interest on Education Loan |
|---|---|
| 1 | INR 1,77,951 |
| 2 | INR 1,73,121 |
| 3 | INR 1,67,679 |
| 4 | INR 1,61,547 |
| 5 | INR 1,54,638 |
| 6 | INR 1,46,851 |
| 7 | INR 1,38,078 |
| 8 | INR 1,28,191 |
| 9 | INR 1,17,051 |
| 10 | INR 1,04,498 |
| 11 | INR 90,353 |
| 12 | INR 74,414 |
| 13 | INR 56,454 |
| 14 | INR 36,215 |
| 15 | INR 13,410 |
Factors Affecting Education Loan Interest Rate
Several factors may affect your Interest calculation. As the EMI depends on the principal, tenure and interest rate, a change in any of the values can affect your EMI amount. Of the three EMI determinants, interest rate is the most vital one as it decides greatly the extent of the monthly payment you need to make. So, your focus should be to negotiate with the lender to get the loan at reasonably lower interest rates. How will you get such rates? Well, for that, you must secure an admission to the institute which boasts of an impressive placement record.