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### How to use this EMI Calculator?

• Use the slider for Selecting Loan Amount
• Select the Loan tenure in Months using slider
• Move the slider and select the Interest Rate
• Recalculate your EMI anytime by changing the input sliders
• EMI will be calculated instantaneously when you move the sliders.

## What is Education Loan EMI?

In such a competitive world with a cut-throat competition almost everywhere, education plays an edge to excel. Quality education has become a demand for a complete and successful life. Keeping this in mind, parents who want to provide their children with the best possible education irrespective of their circumstances, there couldn’t be a better gift they could give to their children. Education is rewarding not only for the children and the parents but it helps a country to grow. The cost of education is increasing rapidly and as a result, studying in any reputed institution is turning into a bullfight. For this reason, one may encounter a shortage of funds. An education loan, therefore, plays a vital role in such a scenario by helping to bridge the gap. Aspiring good career and then someone fulfilling it is a boon in itself. But a smart decision has to be taken by evaluating and comparing the loans provided by different banks. For that, we have an EMI calculator. Taking an education loan helps you in building a good credit score. If you repay the loan in time without any defaults then it also makes it easier for you to get a home, personal or a car loan, etc, in future. The EMI Calculator consists of a formula box and 3 sliders, namely- Loan Amount, Loan Tenure, and Interest Rate. Once you fill in the details, the calculator will tell you the EMI (Equal Monthly Installment) amount that you will need to give to the bank every month, to repay your debts.

## Formula for calculating EMI

You can calculate your EMI Amount with the help of the mathematical formula: EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1] where P, R, and N are the variables. This also means that the EMI value will change every time you change any of the 3 variables. Let’s discuss these 3 variables in detail. ‘P’ stands for the Principal Amount. It is the original loan amount given to you by the bank on which the interest will be calculated. ‘R’ stands for the Rate of Interest set by the bank. N is the number of years given for the repayment of the loan. Since EMIs are paid every month, the duration is calculated in the number of months. So, if you take an education loan of Rs. 10 Lakh with an average interest rate of 12%, the approximate EMI will be: P = 10 lakhs, R = 12%, N = 2 years or 24 months [P x R x (1+R)^N]/[(1+R)^N-1] EMI = [1000000 x 12/100 x (1+12)^24] / [(1+12/100)^24-1] EMI = Rs 47,073

## How does an EMI Calculator work?

An EMI Calculator is a handy tool that calculates the monthly amount payable to the lender (Bank). To calculate the EMI applicable on your loan amount, you need to use the sliders above and adjust the values for principal Amount (P), Time duration (N), and Rate of interest (R). Follow these steps to calculate your EMI Amount:
• Use the slider for Selecting the Loan Amount
• Select the Loan Tenure in Months using slider
• Move the slider and select the Interest Rate
• Recalculate your EMI anytime by changing the input sliders
• EMI will be calculated instantaneously when you move the sliders.
Principal Loan Amount: This is the original amount lent to you by the bank/lender. The loan amount will depend on your need and the purpose of the loan. Higher the loan amount, higher will be the EMI. Tenure: The tenure of a loan refers to the total time given for the repayment of the loan. Since the repayment is done every month, the tenure is calculated in months and not in years. So, a tenure of 2 years is equal to 24 months. The Rate of Interest: This is the rate at which the interest is charged on the principal loan amount. The interest rate varies depending on the type of loan taken and the lender (bank) from which the loan has been taken. The rate of interest has a direct bearing on your EMI amount; hence, it is important to compare interest rates across banks before opting for a loan.

## Factors Affecting Education Loan EMI

There are several factors which affect the EMI calculation. Since the EMI depends broadly upon the principal amount, tenure, and the rate of interest, so any change in these variables can cause a change in the EMI amount itself. Prior to this, one should know that there are many other factors that determine an Education loan (amount). For instance, to apply for the Education loan:
• The Applicant must be an Indian citizen
• The applicant must have completed his higher secondary level schooling
• The applicant should have his Class X, XII and graduation (if applicable) mark sheets ready
• The banks require additional documents such as admission letter of the institution
• Fee structure from the Institution is a requirement
• Bank also inquires if the Institution is duly recognized by a competent authority in India or abroad or not
• Co-applicant income documents such as salary slips or income-tax returns (ITR) proof
Some banks offer the loan even before one has secured admission into the university. As per the Reserve Bank of India (RBI) guidelines, there are no restrictions on the upper age limit.

## Benefits of Education Loan EMI Calculator

Education Loan EMI Calculator is a hassle-free generic tool where you don’t have to do anything except entering the 3 values. Coming to the benefits, it is like you are aware of what you are getting into. You have a crystal-clear idea of the loan amount, the tenure, and the interest you will be paying. This will help you in planning your budget beforehand. So, to ease all your problems and arrange a better flow of money and on time, Cleartax offers ELSS which gives you a tension free amount as and when required.

## FAQs on Education Loan EMI Calculator

Q1. What does an education loan cover?

It basically covers the entire course fee (inclusive of the exam, term charges), accommodation charges (hostel, mess) and other related miscellaneous expenses.

Q2. When will the Repayment period start?

Repayment generally starts when the course is completed. There are some banks which provide a relaxation period of 6 months after securing a job or a year after the completion of studies for the repayment. The repayment period is generally between 5 to 7 years, but it can be extended.

Q3: Will the Education Loan EMI Calculator help me understand how much EMI is payable after I repay a certain amount of principal as a lump-sum during the loan tenure?

A: Yes. If you feed in details of the balance outstanding principal and the tenure (provided by the bank upon such prepayment), the EMI calculator will help you calculate your EMI for the balance outstanding period.

Q4: Can the EMI, calculated by the bank be different from that calculated by the EMI Calculator?

A: The EMI Calculator will calculate EMI amount according to your inputs. If when taking the loan from the bank, you find that there are differences in tenure, interest rate, or actual principal amount (post deductions of margin money) as stated by the bank, then yes,  the EMI calculated may vary.