An overview of the educational loan EMI calculator

Education loans are the stepping stones that help students make their future exemplary in every possible way. If you have a dream of studying in one of the reputed universities in the world but do not have money to study there then an education loan will help you. But an education loan needs to be paid off gradually. To help you get an idea the amount that you will have to pay every month while clearing off your education loan, you can use an educational loan EMI calculator.

 

The educational loan EMI calculator works on the mathematical formula of principal amount compounded annually. The 4 different fields in that formula are the principal amount, the interest rate levied, the tenure of repayment and the EMIs of the education loan.

 

This calculator will help you to speculate the finances of your education loan repayment. The calculator will ask you to fill in information in 3 different fields and press the calculate button. It will then print the EMI amount you would have to pay during the repayment tenure, on the screen.

 


The 3 fields that you have to fill information in are:

 

  1. The principal amount

As the name suggests, you have to put in the principal amount you will borrow to finance your higher studies. The principal amount includes the actual principal, and various charges like the processing fee, the deductions, the service charges and so on. You have to put the cumulative amount that you will borrow in this field.

 

  1. The interest rate levied

The interest rate the lenders are offering you goes in this field of the education loan EMI calculator. Most lenders levy compound interest on their education loans. The interest rate levied is between 9-14%. It changes from lender to lender and from one case to another.

 

  1. The tenure of repayment

The time after the moratorium period ends where you will have to start clearing off the education loan gradually is called tenure of repayment. You have to put in the number of months, in which you will pay back the loan in this field.

 


After you have filled appropriate information in all of these 3 fields and pressed the calculate button, the calculator will display the answer in the fourth field, that is the EMI of repayment. That is the instalment you have to pay every month to clear off your education loan within the tenure of repayment you selected.

 

For your information, the tenure of repayment does not begin as soon as your education loan is sanctioned. It also does not begin when your education loan amount is disbursed. It begins after your moratorium period ends. Moratorium period is a grace period that allows you to get a job and begin to start paying the EMI.

So, this is the overview of the educational loan EMI calculator. Please consult a financial advisor before you take an study loan as it is not as simple as it seems. Note that until the moratorium period, most lenders levy simple interest on the loan. After the moratorium period ends, the lenders levy compound interest on the education loan. We wish you all the best!

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