How to Calculate EMI for Student Loan Abroad: Formula, Examples
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Education loan calculator is a simpler and more transparent tool that you need to plan your study abroad journey before it actually starts. You can try the student loan EMI calculator by putting different information about your loan. It is a completely free instrument.
Almost every student who is planning to study abroad faces the issue of funds to pay the education expenses. An education loan EMI calculator is a simpler and more transparent tool that you need to plan your study abroad journey before you actually start. The student loan EMI calculator is a free instrument where you can customise the amount and tenure to get results according to your needs.
This article will help you to select the best education loan in India. By the end of this blog, we will cover the information related to the advantages of using an education loan calculator, including tips on how you can use this tool effectively.
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- Education Loan EMI Calculation Formula with Example
- How to Calculate Interest During Moratorium Period
- How to Create an Education Loan Repayment Schedule in Excel
- What is An Education Loan Calculator?
- How Does the Education Loan Calculator Help You?
- Benefits of Using Education Loan Calculator
- Steps to Use the Educational Loan EMI Calculator?
Education Loan EMI Calculation Formula with Example
If you want to verify the numbers given by your bank or understand the math behind your monthly installments, you can use the standard EMI formula. This is the exact formula used by major banks like SBI, HDFC Credila, and Union Bank.
The Formula
EMI = [P x R x (1+R)^n] / [(1+R)^n-1]
- P (Principal): The loan amount you borrowed.
- R (Rate of Interest): Monthly interest rate (Annual Rate ÷ 12 ÷ 100).
- n (Tenure): Repayment period in months (Years × 12).
Solved Example
Let's assume you are taking a loan for your Master's degree.
- Loan Amount (P): INR 10,00,000
- Interest Rate: 12% per annum (0.01 monthly)
- Tenure: 2 Years (24 months)
Calculation:
- Numerator: 10,00,000 x 0.01 x (1+0.01)^24
- Denominator: (1+0.01)^24 - 1
- Final EMI: INR 46,073 per month
Note: This formula calculates the EMI after your repayment period starts. It does not account for the moratorium period (your study duration), where interest might accumulate differently. So you can select best education loan in India.
How to Calculate Interest During Moratorium Period
Most standard calculators miss a crucial "hidden cost": the Moratorium Period. This is the "repayment holiday" during your course plus a grace period (usually 6-12 months). During this time, you don't have to pay, but interest still grows.
Simple vs. Compound Interest Trap
Understand the basic difference btween these two ROI, so you can know about mistakes to avoid while applying for student loan:
- Simple Interest: If you pay the interest portion during your studies, banks charge only simple interest. This stops the interest from being added to your principal.
- Compound Interest: If you pay nothing during your studies, the unpaid interest is added to your loan amount (capitalized). When your EMIs finally start, you will pay "interest on interest."
Real Cost Comparison (INR 40 Lakh Loan Example)
See how paying a small amount during your course saves you money later:
| Scenario | Monthly Payment During Study | Total Repayment Amount | Money Saved |
|---|---|---|---|
| Option A: Pay Nothing (Full Moratorium) | INR 0 | High (Interest compounds) | INR 0 |
| Option B: Pay Simple Interest | INR 40,000 (approx) | Lower | INR 2.4 Lakhs |
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How to Create an Education Loan Repayment Schedule in Excel
If you want to create your own personalized education loan calculator, you can do it easily in Microsoft Excel or Google Sheets using the PMT function.
Step-by-Step Guide:
- Open a new sheet and enter your data:
- Cell B1 (Loan Amount): 2000000
- Cell B2 (Annual Interest Rate): 10%
- Cell B3 (Tenure in Years): 10
- To Calculate Monthly EMI:
Copy and paste this formula into any cell: "PMT(B2/12, B3*12, -B1)" (Note: We divide the rate by 12 for monthly interest and multiply tenure by 12 for total months.) - To Calculate Total Interest Payable:
Use this formula: "=(EMI_Cell * B3 * 12) - B1"
This simple method gives you the exact same accuracy as any bank's official EMI calculator.
What is An Education Loan Calculator?
There are many banks that offer loans to students. ROI of education loans and the offers of these institutions are different. It is tough to evaluate all offers to choose ideal one. An education loan calculator comes in frame to make your work effortless.
You can find many websites that offer a free study loan EMI calculator. Here, you can put the amount and other details to find the actual cost of the study loan. You can customise the details and use this tool as many times as you want.
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Fixed rate of interest remains same for your entire education loan's tenure. Floating rates of loans can change over time, depending on market conditions and repo rate. RBI decides repo rate. It is suggested to choose fixed ROI, if you want stability, and floating ROI if you can handle fluctuations.
You can use Education Loan EMI calculator tool by customizing the details according to your needs. You can put different principal amount, tenure and ROI. Students can compare the student loan offers of different banks easily. Students can quickly select the most suitable option based on their individual financial circumstances and repayment capabilities.
How Does the Education Loan Calculator Help You?
Now, let us understand how a student loan calculator is helpful for you. The moment you decide to borrow a study loan, the first question that comes to your mind is the monthly EMI.
The education loan interest rate calculator helps you to get the EMI by changing the rate of interest and amount. It is easy to use, quick and free. It is easy to make a monthly budget by knowing EMI and interest rates.
Benefits of Using Education Loan Calculator
Below, we have mentioned the top advantages of the student loan EMI calculator;
- Precise Estimation of EMIs
- Easy to Use
- Loan Offer Comparison
- Easy Budget Planning
- Improves Financial Awareness
Also Read: Student Loan Vs Self Finance
Steps to Use the Educational Loan EMI Calculator?
To use this online tool, you need some information mentioned here.
- Figure out the Amount You Want: It is the first step that you should focus on. Know the total amount that you need to study abroad or in India.
- Keep Currency Conversion in Mind: As an Indian student, if you want to study abroad, then know the precise amount with the help of the exchange rate of Indian Rupees to the currency of any country.
- Enter Tenure: Tenure of the loan amount is the number of years for which you need to repay the student loan.
- Rate of Interest: Banks offer loans at flexible or fixed rates of interest. For example, the SBI education loan interest rate is 9.45% per year(July 2025).
Also Read:
Top Banks to Offer Loans
Here are the top education loan providers that offer education loans for higher education in India or abroad. Keep in mind that the rate of interest and offers are different for studying in India and abroad.
- State Bank of India
- Axis Bank
- Union Bank of India
- ICICI Bank
- IDFC First Bank
- Credila Financial Services
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Yes, it is completely free to use. There are multiple website offer the education loan emi calculator to students. All you need to know, loan ammount, tenure, and rate of interest. At a click you can know your EMI and Amortization schedule.