How Does Money View Education Loan EMI Calculator Work?
You can repay your education loan via EMIs. This amount is usually a
fixed or a variable amount. Your EMI will be calculated as per your loan
amount and the interest rate levied on it. Your credit score will also
play a significant role in processing your repayment tenure and the
interest rate imposed.
The Money View education loan calculator is designed to provide an easy
user experience. You can follow the steps below to know the EMI rate
that you need to pay monthly.
Step 1: You can start the calculation by
entering the amount that you have borrowed. Use the slider to adjust
Step 2: Use the next slider to add the levied
rate of interest.
Step 3: Now, enter your repayment tenure. You
can select it in months or years
Once done, the calculator will show you the EMI amount that you must
pay. It will also show you the EMI repayment schedule.
Our education loan EMI calculator has features that make the calculation
process easy and quick and error-free. If you wish to do more financial
planning before applying for your loan, then this calculator will ease
your task and let you do so effectively.
Education Loan EMI Calculation Formula
To calculate your EMI use the formula given below:
P x R x (1+R)N / [(1+R)N-1]
P - P stands for Principal Amount. It is the amount
that you have borrowed.
R - R stands for Rate of interest that has been
N - N stands for Number or tenure of repayment.
We will elaborate with an example. Let’s assume Mr. Ravi has borrowed an
amount of Rs. 5,00,000 for his child’s education. The interest rate for
the sanctioned amount is fixed at 10.5% and the tenure for repayment is
So, in this example, Principal (P) is Rs. 5,00,000, the Rate of interest
(R)is 10.5%, and the Repayment Tenure (N) is 60 months.
Before you proceed to calculate the EMI, do not forget to check the
monthly rate of interest. The formula to calculate it is Annual Rate of
interest/12/100 So, in our case, it will be 10.5/12/100 = 0.00875
Once your monthly interest rate is calculated, you can easily check your
EMI per month. 5,00,000 x 0.00875 x (1+0.00875)60 /
[(1+0.00875)60-1] = Rs. 10,747 You can use this exact formula
to check the EMI for every type of loan and not just for an education
Difference Between Flat Balance and Reducing Balance Interest
There are two ways by which an EMI is calculated. The two methods are as
- The Flat Balance Method
The Reducing Balance Interest Rate Method
The Flat Balance Interest Method: In this method, the interest
amount that you need to pay is based on the total loan amount. The
interest amount is fixed for the whole duration of the repayment tenure.
The Reducing Balance Interest Rate Method: In this method, the
interest rate is based on the principal amount that is outstanding each
time. So, instead of the interest rate remaining fixed on the full
amount, it is calculated on the basis of your outstanding amount. As a
result, the principal amount keeps decreasing as you keep making every
payment. This method is usually used by banks to calculate EMIs. The
Money View education loan EMI calculator is also based on this method.
Factors that Affect Education Loan EMI
There are various factors that can affect the EMI payments for an
education loan. Read below to know more:
1. Credit Score and Rate of Interest
The three-digit numerical summary of your credit report is known as the
Credit Score. The credit report displays your previous loan history,
repayments, and your financial behavior. The higher the score the better
are the chances to get a loan sanctioned without any challenges and at a
lower interest rate. Any score above 700 is considered to be a good
Your EMI will be directly proportional to the amount that you wish to
borrow. You must check it before getting the loan processed.
Repayment tenure is inversely proportional to the EMI. It means, if your
repayment tenure is longer, then your monthly EMI will be lower and vice