Education loans empower you to finance your education independently while building your credit rating. Deciding to apply for an education loan requires careful thought and consideration. Luckily, several tools are available to help you with your decision. You can use an education loan EMI calculatorto understand how your monthly repayment obligations may change depending on the loan amount and repayment tenure. First, let’s see how education loan EMIs work.
Understanding Education Loan EMIs
Once you get a loan, you don’t have to pay everything back in one go. You will follow a carefully curated plan that will allow you to pay small amounts every month. These Equated Monthly Installments (EMIs) ensure you don’t face any unnecessary financial pressure. Your EMI depends on your loan amount, rate of interest, and repayment timeline.
How Do I Calculate EMI for Education Loan?
You can use a mathematical formula to calculate education loan EMI. You need to know the principal loan amount, interest rate, and loan tenure. Let’s look at the formula:
Assume you have taken a loan worth INR 10 lakhs that you intend to repay over 36 months. With an interest rate of 15%, your EMI is INR 34,665. Doing the calculations by yourself can take a lot of time.
Instead, you can use an online education loan calculator to quickly understand your monthly outgoings.
Benefits of an Online EMI Calculator for Education Loans
When you use an online EMI calculator, you can benefit from:
- Instant Answers
The online calculator will instantly calculate EMI for education loans. Once you enter the information, you’ll see the estimated EMI within seconds! If you want to calculate the amount with a pen and paper, you can, but it will take much longer.
- Ease of Use
Online calculators are easy to use. Simply input the required details to calculate education loan EMI.
- Multiple Options
You can use the calculator to check what your EMI will look like with different combinations of principal amounts and tenure. If you have a budget in mind, you can see what loan amount you should apply for and what tenure you should pick to get an EMI within your limit.
- Accurate Calculations for Better Planning
An online EMI calculator will provide more accurate results than mental maths. You can use the calculator to understand your potential EMIs and manage your finances accordingly. You can plan to save to ensure you repay the education loan seamlessly.
Understanding Your EMI Repayment Schedule
Education loans allow borrowers to customise their repayment schedules. Once your loan gets disbursed, you can opt to not make any payments until six months after your course ends or for a few months after securing a job – whichever is sooner. This grace period is known as the moratorium period which will differ depending on the financial institution. If you have the means, you can start paying off your interest before the repayment period begins. When you do this, it will reduce your EMI burden over time or shorten your loan tenure.
At Avanse Financial Services, we always advise our student fraternity to make a small contribution in the form of simple interest and partial interest as the interest starts to accrue soon after taking an education loan. This also instils financially prudent habits among the students.
The online education loan EMI calculatoris freely available and easy to use. Before applying for a loan, use the calculator to understand your potential EMI amounts. You can even use the calculator to understand the ideal loan amount you should choose as per your repayment capacity.
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