Education Loan EMI Calculator

Education loan EMI for ₹5 lakh to ₹50 lakh

The monthly EMI at 10% a year on the amount you owe when repayment starts (the loan plus any unpaid interest from the moratorium).

How interest builds up during the moratorium

Most education loans have a moratorium: the course period plus up to a year, during which you need not repay. Interest still runs, usually as simple interest on the amount disbursed so far, and if you do not pay it, the bank adds it to the loan when repayment starts.

For a ₹10 lakh loan at 10% for a 4-year course with one year of grace, the moratorium adds about ₹5,00,000, so you start repaying ₹15,00,000. Over 10 years the EMI is ₹19,823 and the total interest ₹13,78,713. If the interest is paid every month while studying (₹8,333), the EMI falls to ₹13,215. In practice, banks disburse fees year by year, so the interest during the course is somewhat lower than this.

Education loan interest rates in October 2026

SBI's education loans start from 6.9% a year, for students at the top-ranked institutions covered by PM Vidyalaxmi. For other institutions, the rate depends on the course, the college, the loan amount and whether you offer collateral; loans for study abroad and loans from NBFCs usually cost more. See SBI's rate card and ask about concessions, as some banks charge girl students slightly less.

Collateral-free loans and PM Vidyalaxmi

• Up to ₹7.5 lakh: banks usually lend without collateral or a third-party guarantee, backed by the government's credit guarantee fund; a parent is normally the co-borrower.
• PM Vidyalaxmi (since November 2024): students admitted on merit to designated quality higher education institutions can get loans with no collateral and no guarantor, applied for through the PM Vidyalaxmi portal. Loans up to ₹7.5 lakh carry a 75% government guarantee, and families earning up to ₹8 lakh a year get 3% interest subvention on loans up to ₹10 lakh.
• Larger loans usually need collateral such as property, a fixed deposit or insurance policies.

Tax deduction under Section 80E

In the old regime, the interest on an education loan is deductible:

• with no upper limit, unlike most deductions;
• for the year you start repaying and the 7 years after it (8 in all);
• for a loan from a bank or approved financial institution, for higher education of yourself, your spouse, your children, or a student you are the legal guardian of;
• by the person who repays the loan, so it helps most once the student is earning and paying tax.

The principal is not deductible, and the new regime does not allow 80E. If the interest is large, compare both regimes with the income tax calculator. The Income-tax Act, 2025 renumbers the section from tax year 2026-27 but keeps the deduction.

Tips for an education loan

• Borrow only what the course needs, and take it as fees fall due, not all at once.
• Pay the interest during the course if you can; it keeps the EMI down later.
• Prepay when you can. Floating-rate loans sanctioned from 1 January 2026 carry no prepayment charge.
• Plan around your first salary. The salary calculator shows the take-home pay that will carry the EMI.
• For parents saving ahead, the SIP calculator and Sukanya Samriddhi calculator show what regular saving can build.

Frequently asked questions

Sources

• State Bank of India – loan interest rates
• PM Vidyalaxmi – education loan portal, Government of India
• Income Tax Department – Acts, Rules and circulars

Last updated 6 October 2026. Results are estimates for planning only and are not investment, tax or legal advice. See our disclaimer.