Financing your studies abroad requires careful planning, and understanding your loan repayments is crucial for it. This article equips you with the knowledge and tools to navigate this aspect effectively, including an education loan calculator you can use to compare different scenarios based on changing variables like loan term, rate of interest, etc.
What is an education loan EMI calculator?
Planning for your studies abroad can be overwhelming. However, when you focus on the most important parts, you can keep the chaos away.
For instance, most students can make better decisions when they know what exactly they’d need to repay, if they go for an education loan.
This monthly repayment, of course, is the education loan EMI. Calculating it manually is time consuming.
This is where an education loan EMI calculator helps.
An education loan EMI calculator simplifies the process by factoring in:
- Loan Amount: The total sum borrowed to finance your education.
- Interest Rate: The percentage charged on the loan amount.
- Repayment Tenure: The duration (in years) over which you’ll repay the loan.
By inputting these details, the calculator uses a formula to determine your exact EMI. This provides a clear picture of your monthly repayment commitment.
Advantages of using the educational loan EMI calculator
Imagine setting off to study abroad and fulfilling your academic dreams. Then, reality hits – tuition fees can be high, ranging from ₹50 lakhs to ₹1.5 crore depending on your chosen country, program, and college.
This can feel overwhelming, especially when it comes to understanding how you’ll manage the loan repayments.
Here’s where an education loan EMI calculator brings order to chaos.
Think of it as a financial translator. It takes that large loan amount and breaks it down into easy-to-understand monthly payments (EMIs). This way, that seemingly huge sum starts to feel a lot more manageable.
But the benefits go beyond simply translating numbers.
An education loan EMI calculator also lets you experiment with different scenarios. You can try out various loan amounts, interest rates, and repayment durations. This helps you answer crucial questions like:
- How much can I comfortably afford to pay each month?
- What’s the total interest I’ll end up paying?
- What’s the maximum loan amount I should consider?
Manually calculating these different options can be complex and time-consuming. An education loan EMI calculator does the heavy lifting for you, making it a fantastic tool for understanding your loan options.
In the next section, we’ll understand how this calculator works, and how an education loan is calculated.
How to use the educational loan EMI calculator?
Now that you know how an education loan EMI calculator simplifies things, let’s see how it works.
- Education Loan Amount: This is the total amount you borrow to finance your studies abroad.
- Loan Tenure: This refers to the total duration you have to repay the loan, usually in years.
- Interest Rate: This is the percentage charged on the loan amount.
These are the main factors considered by the calculator, striking a good balance between keeping things simple and accurate.
While there are other aspects that can influence your EMI, focusing on these three points provides a solid foundation for understanding your repayment plan.
Manually calculating your EMI can be tricky. The formula involves complex calculations.
While the calculator does the complex calculations for you, understanding the underlying formula can be helpful.
Here’s a breakdown of how education loan is calculated (the EMI for it):
EMI = [ P x R x (1 + R) ^ N ] / [ (1 + R) ^ N – 1]
where:
- P: Loan amount (Principal)
- R: Monthly interest rate (Interest rate divided by the number of months in a year)
- N: Loan tenure in months (Number of years multiplied by 12)
For a loan of 50,00,000 INR, with a 10-year duration, and an 8% annual interest rate, the calculation steps are as follows:
Loan amount (P): 50,00,000 INR
Annual interest rate: 8% (which we convert to a monthly interest rate by dividing by 12 and then by 100 to get a decimal)
Loan tenure (N): 10 years, or 120 months (10 years × 12 months per year)
Given the monthly interest rate (R) of 8% divided by 12, then divided by 100 to convert to a decimal:
R= 8/(12×100) = 0.00666667
The EMI calculation using our formula is:
EMI = 50,00,000×0.00666667×(1+0.00666667)120 / (1+ 0.00666667)120 -1
Solving this gives us an EMI of approximately 60,664 INR. This means, for a loan of 50 lakh, with a 10-year term at an 8% interest rate, you would pay about 60,664 INR monthly.
Let’s face it, this can be quite overwhelming!
Thankfully, the FundRight education loan EMI calculator takes care of all the heavy lifting.
In just a few seconds, you can input your details and get a clear picture of your monthly payments.
An illustration of education loan EMI calculator from Fundright
Remember: The interest rate used in our example (8%) is for illustrative purposes only.
In the next section, we’ll explore the current market landscape of interest rates offered by different lenders. This will help you make informed decisions when comparing loan options.
Compare the best education loans provided by different banks and NBFCs
| Bank/NBFC | Interest Rate Range | Loan Type | Loan Amount Range |
| State Bank of India | 8.30% to 11.50% | Need-based term loan up to 15 years. | Up to INR 1.5 Crore |
| Punjab National Bank | 8.55% to 11.25% | Need-based term loan up to 15 years. | Up to INR 1 Crore |
| Bank of Baroda | 9.10% to 12.45% | Term loan need-based funding. | Up to INR 80 Lakhs |
| ICICI Bank | 9.50% onwards | Term loan up to INR 1 crore for domestic, and INR 2 crore for international studies. | Up to INR 2 Crore |
| Bank of India | 8.25% to 11.60% | Term loan need-based financing. | Up to INR 1 Crore |
| Bank of Maharashtra | 9.20% to 11.05% | Term loan up to INR 10 lakh in domestic and up to INR 20 lakh for abroad studies. | Up to INR 20 Lakhs |
| Central Bank of India | 8.30% to 11.25% | Term loan up to INR 50 lakh. | Up to INR 50 Lakhs |
| Axis Bank | 13.70% to 15.20% | Customizable loans with flexible repayment options. | Up to INR 40 Lakhs |
| Kotak Mahindra Bank | Up to 16.00% | Custom solutions based on course and institution. | Varies |
| Canara Bank | 7.30% to 9.30% | Need-based term loan. | Up to INR 40 Lakhs |
| Mpower Finance | Starts from 8.00% | No collateral, cosigner-free loans. | Up to $100,000 |
| Prodigy Finance | Variable | Borderless credit, based on future earning potential. | Up to 100% of tuition fees |
Important Note:
- The interest rates mentioned are indicative and subject to change based on individual circumstances and market conditions.
- Additional factors like processing fees and variable interest rates might also apply.
Also Read: How to Compare Education Loan Interest Rates for Abroad Studies
Limitations of manual comparison of education loan interest rates and EMI
Comparing loans solely based on individual bank websites can be restrictive. Here’s why:
- Limited Scope: You might miss out on prominent lenders or miss crucial NBFCs.
- Time-Consuming: Contacting each lender and gathering information can be a lengthy process.
- Incomplete Information: Key details like the latest offers might be unavailable.
There’s a method even better than using an EMI calculator.
Education loan comparison with FundRight
Here’s how FundRight empowers you:
- Register and complete your profile on FundRight
- Get personalized comparisons from India’s top 15 lenders within 15 minutes.
- Secure loan offers within 2 days, potentially with interest rates that beat the market average.
- Get the support of our in-house financial advisors who negotiate on your behalf to secure favorable loan terms.
Experience the FundRight Advantage:
FundRight seamlessly combines technology with financial services.
Secure the best loan option without leaving your home.
The platform anonymously shares your profile with lenders, ensuring data privacy.
Upload documents securely, eliminating the hassle of visiting multiple branches.
Leverage the guidance of experienced financial advisors who have helped countless students secure loans for top universities abroad.
FundRight goes beyond just comparing rates. It empowers you with the tools and guidance to find the perfect loan fit for your educational aspirations.
Ask us how some students saved up to ₹23 lakhs with FundRight.
Also Read: Education Loan in India 2024
FAQs on education loan calculators
An education loan EMI calculator uses the loan amount, interest rate, and tenure to calculate your monthly repayment amount.
Yes, they provide a close estimate but may not account for bank-specific fees or changes in interest rates over time.
The education loan calculators from SBI, HDFC, and the FundRight portal are highly recommended for their accuracy and ease of use.
Yes, they may not consider bank-specific charges, processing fees, or changes in the interest rate during the loan period.
Yes, both help you understand the interest and EMI on your education loan, though the focus may vary slightly.
Rates vary due to factors like loan amount, tenure, the applicant’s credit score, and the bank’s lending policies.
Yes, by entering your loan details, you can see the total interest payable over the loan period.
Other education loan calculators exist, including:
Education loan eligibility calculator: Estimates your eligibility for a loan based on factors like income and credit score.
Education loan tax exemption calculator: Provides an idea of potential tax benefits associated with your education loan.
Education loan calculator with moratorium period: Factors in a temporary pause in repayments during your initial studies.
