An education loan EMI (Equated Monthly Instalment) calculator is a useful tool for determining the amount of monthly instalment that a borrower needs to pay towards their education loan. The education loan EMI calculator calculates the EMI based on parameters such as principal loan amount, interest rate, and loan tenure. This EMI calculator is a valuable tool for borrowers as it helps them in loan planning, comparison of loan options, financial management, understanding the interest component, and prepayment planning. Borrowers can make well-informed decisions and manage their education loans efficiently.
In this blog, we will talk more about the education loan EMI Calculator, with or without a moratorium period.
Table of contents
Functioning of Education Loan EMI Calculator
The working of the education loan EMI calculator is based on various factors like loan amount, interest rates, loan tenure, EMI components and many others. Let’s have a look at its functioning, in detail.
- Loan Amount: The borrower enters the desired loan amount they wish to avail for their education. This is the total amount they need for their educational expenses, including tuition fees, living expenses, books, etc.
- Interest Rate: The borrower enters the applicable interest rate for the education loan. The interest rate may vary depending on factors such as the lender, loan type, borrower’s creditworthiness, and prevailing market rates.
- Loan Tenure: The borrower enters the loan tenure or the duration over which they plan to repay the education loan. It is usually expressed in months or years.
- Calculation of EMI: Using the loan amount, loan tenure, and interest rate, the EMI calculator applies a mathematical formula to calculate the equated monthly instalment. The formula takes into account the principal amount, loan tenure, and interest rate to determine the monthly repayment amount.
- Breakdown of EMI Components: The Fly Finance education loan EMI calculator also provides a breakdown of the EMI into principal and interest components. It shows how much of each EMI payment goes towards repaying the principal loan amount and how much goes towards paying the interest.
- Additional Charges: Some calculators may also consider additional charges such as processing fees or any other applicable fees. These charges are added to the loan amount and affect the overall EMI calculation.
- Display of Results: After the calculations are performed, the EMI calculator displays the monthly EMI amount, the total interest payable over the loan tenure, and the total repayment amount (principal amount + interest).
- Further Analysis: Borrowers can make adjustments to the loan amount, interest rate, or tenure to see how it impacts the EMI amount. This allows them to compare different scenarios and choose the most suitable option based on their financial capacity.
Also Read: Taken an education loan to fund higher studies? Check our blog on Student Loan Debt and learn all about relief, applications, and calculator.
Education Loan EMI Calculation Formula With Moratorium or Without Moratorium
In the Fly Finance Education Loan EMI calculator, students have the option to utilize an education loan calculator, where you can input the desired loan amount manually, or you can calculate the EMI using a mathematical formula.
The formula for calculating the EMI amount is as follows: EMI amount = [P x R x (1+R)^N]/[(1+R)^N-1].
In this equation, ‘P’ represents the Principal Amount, ‘R’ stands for the Rate of Interest provided by the bank, and ‘N’ represents the number of years allocated for loan repayment. It is important to note that modifying any of these variables will result in a change in the EMI value.
Significance of Education Loan EMI Calculator
Education Loan EMI Calculator helps in better loan planning by providing loan comparison options from different lenders. This also helps an individual with proper financial management by providing a gist of monthly financial commitments. Let’s have a look at the significance of education loan EMI calculator in detail-
Loan Planning
By using the EMI calculator, prospective borrowers can plan their finances effectively. They can adjust the loan amount, tenure, and interest rate to find a suitable EMI that fits within their budget. It helps them understand the affordability of the loan and make informed decisions.
Loan Comparison Options
Fly Finance calculator can be used to compare different loan options from various banks or financial institutions. By inputting the loan details, borrowers can quickly evaluate and compare the EMI amounts, interest rates, and tenures offered by different lenders. This allows them to choose the most favourable loan option.
Also Read: Read our blog to know How Much Education Loan Can You Get To Study Abroad and check the loan amount provided by various lending sources.
Financial Management
The Fly Finance education loan EMI calculator provides a clear picture of the monthly financial commitment required to repay the education loan. It helps borrowers to plan their monthly budgets and allocate funds accordingly. It allows them to assess their financial capabilities and make timely repayments.
Understanding the Interest Component
The EMI calculator breaks down the EMI into principal and interest components. Borrowers can analyze the interest amount paid over the loan tenure. This information helps them understand the total interest outgo and the impact of interest rates on their repayment amount.
Prepayment Planning
An EMI calculator also helps borrowers determine the potential benefits of making prepayments on their education loans. By adjusting the loan tenure or prepayment amount, borrowers can see the impact on the EMI and total interest paid. This assists them in making decisions regarding prepayment and reducing the loan burden.
Education Loan EMI Repayment Methods With Moratorium or Without Moratorium
Education loan repayment can take place in the following ways- full EMI repayment, full moratorium repayment option, simple interest method, or partial interest payment method. Students availing of study abroad education loans via Fly Finance and using its education loan EMI calculator can repay EMIs in either of the following repayment modes:
Full/Direct EMI Repayment Method
In this mode, the monthly instalment begins the following month after the disbursement has taken place. This instalment comprises both the principal amount and the interest component.
Complete/Full Moratorium Repayment Method
In this EMI repayment mode, students are not obligated to make any payments during both the course duration and the moratorium period. Not a single amount is required to be paid during this time. After the moratorium period ends, the EMI begins, which includes both the principal amount and the interest component. The monthly instalments can be calculated with the Fly Finance education loan EMI calculator
Simple/Full Interest Repayment Method
In this mode, the borrower is obligated to make payments solely towards the interest component during the course duration and the moratorium period. After the moratorium period concludes, the borrower is then required to repay the principal amount along with the interest component.
Partial Simple Interest Repayment Method
In this method, the borrower is required to make a fixed monthly instalment, typically ranging from INR 2,000 to INR 11,000, throughout the duration of the loan and the moratorium period. After the moratorium period ends, the borrower must pay the principal amount in addition to the interest component.
Also Read: Check our blog on Study Abroad Loan Tips and ease your study abroad financial burden with expert tips from Fly Finance.
FAQs
Once you have made up your mind to obtain an education loan, it is recommended to utilize the this EMI calculator. This calculator necessitates the loan amount, interest rate, and loan term as inputs, and generates an estimate of your EMI amount.
Yes. The EMI loan calculator enables you to evaluate and contrast the loan amount based on the varying interest rates provided by different banks.
An EMI calculator offers details regarding the monthly instalment for a specific loan amount, loan duration, and interest rate. Conversely, a moratorium calculator provides information on how an outstanding loan balance can be affected by an increase in EMI, interest rate, or loan duration.
The calculation of the education loan is based on various factors like loan amount, interest rates, loan tenure, breakdown of EMI components, additional charges and many others.
Suppose, you take an education loan of Rs 20 lakh with an average interest rate of 12% for 2 years. Then, the EMI using the EMI calculator formula will be P = 20 lakhs, R = 12/100/12 (Convert it to months), N = 2 years or 24 months EMI = [20,00,000 x 12/100/12 x (1+12/100/12)^24] / [(1+12/100/12)^24-1] EMI = Rs 94,147.
This was all about the Education loan EMI Calculator with or without a moratorium period. To know more about international scholarships, the loan application process, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
