Student Loan Calculator

Moratorium period = Course Duration + Grace Period. During this time, you don't have to pay EMIs. However, interest still accrues on your loan. For a 2-year MBA with 6-month grace period, moratorium is 30 months. After this, EMI repayment begins. The catch: Interest accumulated during moratorium is added to your principal, so you end up paying more. Example: $50,000 loan at 8% for 30 months moratorium = $10,000+ interest added before you even start paying.

Simple Interest: Interest = Principal × Rate × Time. Calculated only on original loan amount. Most government/PSU banks use this—it's borrower-friendly. Compound Interest: Interest is calculated on Principal + Previously Accrued Interest. Much more expensive. Example on $50,000 at 10% for 3 years: Simple: $50,000 × 10% × 3 = $15,000 interest. Compound: $50,000 × (1.10)³ - $50,000 = $16,550 interest. That's $1,550 extra! Always confirm with your lender which type they use.

US has two main types: Subsidized Loans (for demonstrated financial need): Government pays interest while you're in school. No interest accumulates during study—huge benefit! Unsubsidized Loans: Interest accrues from day 1. Current rates (2024): ~5-7% for federal, 8-14% for private. Repayment starts 6 months after graduation. Options include: Standard (10-year), Graduated (starts low, increases), Income-Driven (10-25% of discretionary income), and Public Service Loan Forgiveness after 10 years of qualifying payments.

UK uses an income-contingent system: Plan 2 (post-2012 England/Wales): Repay 9% of income over £27,295/year. If you earn £30,000, you pay 9% of £2,705 = £243/year. No fixed monthly EMI—it scales with income. Interest: RPI + up to 3% based on income. The outstanding balance is written off after 30 years. For many graduates, especially in lower-paying fields, this is essentially a graduate tax rather than a traditional loan. Some never fully repay, which is by design.

Australia's HECS-HELP is one of the most borrower-friendly systems: No Interest: Debt is indexed to CPI (inflation), not an interest rate. Repayment Threshold: Only repay when earning over $51,550/year (2024). Rates: 1-10% of income depending on how much you earn. No Fixed EMI: Automatically deducted from salary via tax system. No credit check, no cosigner needed. Debt doesn't affect credit score. Many consider this a model system—you only pay when you can afford to.

Section 80E of Income Tax Act provides: Deduction on ENTIRE interest paid (no upper limit) on education loan for self, spouse, or children. Available for 8 years starting from the year you begin repaying. Only for higher education (post-12th). Example: If you pay ₹1,50,000 interest in a year and are in 30% tax bracket, you save ₹45,000 in taxes. This effectively reduces your interest cost. Make sure to get an interest certificate from your bank annually for claiming this deduction.

YES, if you can afford it! Even small payments prevent interest from compounding. Example: $50,000 loan at 10% for 4-year MBBS + 1-year grace: Without paying: $25,000+ interest added to principal. With paying $400/month during study: Save $10,000+ over loan lifetime. Many banks offer 'interest-only' payment during study—this is much smaller than full EMI and prevents the debt from ballooning. If parents can help with this during study, it significantly reduces total burden on the graduate.

Rule of thumb: EMI should be 15-20% of gross monthly income for comfort. 50/30/20 Rule: 50% needs, 30% wants, 20% savings/debt. If EMI exceeds 20%, you'll feel financially stressed. Example: If EMI is $800/month, you need minimum $4,000/month ($48,000/year) income for it to be 20%. For $50,000 loan at 7% over 10 years, EMI ≈ $580. Need ~$2,900/month minimum = $35,000/year entry salary. Always research expected starting salaries in your field before borrowing.

Subsidized (need-based): Government pays interest while in school and during 6-month grace period. Only for undergraduate students with demonstrated financial need. Maximum limit around $3,500-5,500/year. Unsubsidized (available to all): Interest accrues from disbursement. Available for undergrad and grad. Higher limits: $5,500-20,500/year depending on level. Grad students can only get unsubsidized. Always exhaust subsidized loans first—they're essentially interest-free during school!

Yes, in several scenarios: US PSLF: After 10 years of qualifying payments while working for government/nonprofit. US IDR Forgiveness: After 20-25 years of income-driven payments, remaining balance forgiven (may be taxable). UK: Written off after 30 years (Plan 2). Australia: Written off upon death. Disability: Often discharged for permanent disability. Bankruptcy: Historically very difficult, but recent changes making it easier in some cases. Death: Most federal and some private loans discharged. Fraud: If school committed fraud, loans may be discharged.