How to calculate interest rates using education loan calculators

 

Various banks and financial institutions in India offer education loans for students pursuing specialized services within the country and abroad. These banks and financial institutions generally release a list of permitted courses and educational institutions for which these education loans are granted.

 

The interest rate on education loans  in India generally includes 1.5 to 2 percent of the principal loan amount added to the existing marginal cost of lending rate (MCLR). Education loan interest rates in India start from as low as 11.25 per cent of the principal amount.

 


●       The process for calculating education loan EMIs

To calculate the education loan interest rate for a particular month, divide your interest rate by the number of payments to be made that year. For instance, if your interest is 6 per cent per annum and you make 12 payments a year, you need to divide 0.06 by 12. This will give you the figure of 0.005. Multiply this number by your remaining loan balance to find out how much you'll pay in interest that month.

 

●       Using calculators for quick and accurate results

Interest rates on education loans are also calculated using education loan calculators.  These calculators are simple online tools like normal calculators. To use them, students need to first visit the bank’s or financial institute’s website and locate the tool on it.

 

After locating the tool, students just have to fill in a few details about their loan amount, the tenure for which the loan has been secured and the rate of interest. After filling in these details, students have just click on the submit button. Within seconds, they will have your monthly EMI amount displayed on your screen.

 

Students can also try different combinations and permutations of the loan amount, tenure and rate of interest to find the most suitable repayment plan. They can modify the variables according to their budgetary requirements.  Using an education loan calculator guarantees quick and accurate results for students.

 

●       Other types of calculators available for students

Knowing their exact EMIs can help students devise their repayment plan accurately. They can plan their monthly budgets to accommodate the monthly payment of their EMIs.

Students can also use expense calculators to estimate the exact loan amount they would require for the entire duration of your course. This will prevent them from

 burrowing more than they can afford to repay.

 

Another useful tool for students is the education loan repayment calculator that provides estimates that are used by students to plan their repayment strategies. The results of these calculators are based on a standard repayment plan that involves paying a fixed amount every month for a set number of months, based on the student’s loan term and his current prepayment status. The calculator works on a fixed interest rate and assumes that the student’s loan is currently in repayment.


Using an education loan calculators is easier than doing the calculations mentally or even on a computer.  The tool helps students make better repayment plans for their education loans.

 


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