How this calculation works
Separate the period before scheduled repayment from the later EMI period. The model accrues simple interest on the original disbursed amount throughout study and moratorium. You can pay that interest during deferment or add it once to the amount financed when EMI repayment begins. Comparing these choices shows why a repayment holiday need not be an interest holiday.
Worked example
This example uses illustrative inputs. Your current result is shown above.
For ₹1,20,000 at 12% annual interest, six study months and six moratorium months accrue ₹14,400 simple interest. Choose Capitalise and a one-year repayment term: ₹1,34,400 enters repayment, giving ₹11,941.28 EMI and ₹1,43,295.33 total repayment. Total interest on the original loan is ₹23,295.33.
Assumptions and limits
- The full principal is assumed disbursed at the start; staggered tuition disbursals and changing interest rates are not modelled.
- Deferment interest is simple and capitalised once when selected. Subsidies, rebates, fee taxes and agreement-specific moratorium treatment are excluded.
Questions people ask
Does moratorium mean no interest?
Not in this model. Interest accrues during both study and moratorium; your choice determines whether it is paid then or added to repayment principal.
Can I model instalment-wise tuition disbursals?
Not directly. The calculator assumes the full amount is outstanding throughout deferment, so a staged-disbursal loan needs its actual dated cash-flow schedule.