Education Loan EMI Calculator

What is an Education Loan EMI Calculator?

An Education loan EMI calculator is a financial tool for calculating the monthly EMI on a loan taken to pursue higher studies or professional certifications. It calculates the EMI based on various inputs such as loan amount, the interest rate at which the loan is taken, and the duration of the loan. Combining all these factors using the education loan EMI calculator formula gives you a clear picture of how much amount you need to pay each month.

To use Pocketful’s Education Loan EMI calculator, one needs to enter the following inputs:

1. Loan Amount
2. Rate of Interest
3. Loan Tenure

The Education Loan EMI calculator gives output in the form of

1. Monthly EMI
2. Principal Amount
3. Total Interest
4. Total Amount (Principal Amount + Interest)

How can an Education Loan EMI calculator help you?

The Education Loan EMI Calculator assists individuals in making informed financial decisions when planning to pursue higher education or professional certification in the following ways:

1. EMI: An education loan EMI calculator helps you calculate the monthly EMI and can help you plan your monthly budget effectively.
2. Recalculations: Using an education loan EMI calculator, one can experiment with different interest rates and other inputs to check how they affect the EMI amount.
3. Loan Tenure: Through an education loan EMI calculator, one can check the impact on the EMI for different loan tenures.
4. Cost Analysis: One can calculate the total interest paid in addition to the principal amount of the loan and then calculate the actual cost of studying.

Formula to Calculate Education Loan EMI

The formula to calculate the EMI of an education loan is:

EMI = [ P * R * ( 1 + R ) ^ N ] / [ ( 1 + R ) ^ N – 1 ]

EMI	Equated Monthly Installment
P	Principal Amount of Loan
R	Interest Rate of Loan
N	Loan Tenure in Months or Number of Monthly Installments

Let’s understand it with an example.

Mr. A decided to pursue an MBA at ABC College, which charges approximately ₹25,00,000 for a 2-year course, and he approached a bank that offered him a loan of the same amount at an annual interest rate of 9% for a tenure of 5 years.

Now, let’s calculate the monthly EMI that Mr A needs to pay.

In the case of Mr. A, the following are the inputs

• Principal Amount of Loan: ₹25,00,000
• Interest Rate of Loan: 9% P.A.
• Loan Tenure: 5 Years
• Converting the annual interest rate of the loan into a monthly interest rate: 9%/12 = 0.0075
• Converting the Yearly Loan Tenure into months: 5 years * 12 = 60 months

Using the formula of the Education Loan EMI Calculator and putting the values in it:

EMI = [ P * R * ( 1 + R ) ^ N ] / [ ( 1 + R ) ^ N – 1 ]

25,00,000 * 0.0075 * (1+0.0075) ^ 60 / (1 + 0.0075) ^ 60 – 1

Your Monthly EMI will come to around ₹51,896 per month.

The amount of interest will be calculated as follows:
Monthly EMI * Tenure in Months – Principal Amount
19,566 * 60 – 10,00,000

Hence, the amount of total interest which you need to pay will be ₹6,13,753

And the Total Amount Payable = Total Interest + Principal Amount
= ₹6,13,753 + ₹25,00,000
= ₹31,13,753

Therefore, Mr A has to pay a monthly EMI of ₹51,896 for 60 months, which amounts to ₹6,13,753 in total interest on the loan and the principal amount of ₹25,00,000.

How to use a Pocketful Education Loan EMI calculator?

You can easily calculate the EMI of an education loan through Pocketful’s Education Loan EMI calculator offered on the Pocketful website; the steps to use the same are as follows:

1. To calculate the EMI of your education loan, the first step is to visit Pocketful’s website.
2. Then, you need to scroll to the bottom of the home page; there, you will find a section named Tools; click on it.
3. Then, the financial tools page will appear, where you will find a tab named Financial Calculators; click on it.
4. Then you see an option named Education Loan EMI Calculator; click on it.
5. Enter the details such as Loan Amount, Rate of Interest, and Loan Tenure.
6. Once you enter the details of your loan, the calculator instantly calculates the monthly EMI to be paid, the total interest, and the total amount.

Benefits of using the Education Loan EMI calculator

The major benefits of using the education loan EMI calculator are as follows:

1. Comparison: One can easily compare the EMI on loans offered by different banks by adjusting the interest rate, tenure, and loan amount, enabling them to choose the most cost-efficient option.
2. Convenient:One can easily save time and effort using the EMI calculator available online.
3. Affordability: An individual can check the estimated EMI amount before taking a loan, which helps them plan their expenses according to the budget.
4. Negotiating: By having knowledge about an estimated EMI amount of the loan, you can negotiate with the banks or lenders.