Question 1

What is a moratorium period on an education loan?

Accepted Answer

The moratorium is the period during the course (plus typically a 6-12 month grace period after) when you are not required to pay EMIs. Interest usually still accrues during this time and gets added to the principal, so your actual repayment starts on a larger loan amount than you originally borrowed.

Question 2

Why is my EMI based on a larger amount than I borrowed?

Accepted Answer

Because interest that accrues during the moratorium period is typically capitalised — added to your principal — before regular EMI repayment begins. This calculator reflects that by growing your loan amount for the moratorium period before computing the EMI.

Question 3

Can I pay interest during the moratorium to avoid this?

Accepted Answer

Many lenders allow (and some incentivise, with a small interest rate discount) paying the accruing interest during the moratorium period instead of letting it capitalise — doing so keeps your principal unchanged and your eventual EMI lower.

Question 4

Are there tax benefits on education loan interest?

Accepted Answer

Education loan interest can qualify for a full deduction (no upper amount cap) under Section 80E for up to 8 years from when repayment starts, or until the loan is repaid if that happens sooner — but only under the old tax regime, so check with a tax advisor if you've switched to the new regime.

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