What is the interest rate for student loans?

As of 2025, US federal student loan rates are set annually: approximately 6.5% for undergraduates, 8% for graduate students, and 9% for PLUS loans. Private student loan rates range from 4–15%+ depending on the lender and your (or your co-signer's) credit score. Federal loans offer fixed rates and income-driven repayment options; private loans may have variable rates that can increase over time.

What is a grace period for student loans?

A grace period is a window after leaving school (graduation, dropping below half-time enrollment, or withdrawal) during which you are not required to make loan payments. Federal student loans typically have a 6-month grace period. Interest may still accrue on unsubsidized loans during this time and is added to your principal balance (capitalized) when repayment begins.

What expenses does an education loan cover?

Student loans can cover tuition and fees, room and board (on or off campus), textbooks and supplies, transportation, and personal expenses — up to your school's official Cost of Attendance (COA). Amounts above the COA cannot be borrowed. Private loans may be less flexible in what they cover; check with your lender before borrowing.

Is student loan interest tax-deductible?

In the US, you can deduct up to $2,500 of student loan interest per year on your federal income tax return under the Student Loan Interest Deduction, subject to income limits. The deduction phases out at higher incomes (check current IRS thresholds). This deduction is available even if you don't itemize. Other countries have similar schemes — check your local tax authority for details.

Can I pay off a student loan early?

Yes — federal and most private student loans in the US allow early payoff without penalty. Extra payments reduce your principal, which lowers the interest that accrues each month. You can direct extra payments toward the highest-rate loan first (avalanche method) for maximum savings. Use the Prepayment Simulator on this page to see exactly how many months and how much interest you save with a one-time extra payment.

Education Loan EMI Calculator

Funding your education? Calculate your student loan EMI, total interest payable, and the full repayment schedule. Pre-filled with typical education loan rates — adjust to your bank's offer.

Currency

Loan Amount ($)

$1,000$10,000,000

Annual Interest Rate

136

Loan Tenure

130

Calculation Mode

Monthly EMI

$568

Total Interest

$18,129

26.6% of total

Total Payment

$68,129

Principal + Interest

Principal vs Interest

Principal

$50,000 (73.4%)

Interest

$18,129 (26.6%)

Outstanding Balance by Year

Yr 1

$46,329

Yr 2

$42,412

Yr 3

$38,233

Yr 4

$33,774

Yr 5

$29,016

Yr 6

$23,940

Yr 7

$18,524

Yr 8

$12,745

Yr 9

$6,579

Yr 10

Amortization Schedule

Month	EMI	Principal	Interest	Balance
1	$568	$297	$271	$49,703
2	$568	$299	$269	$49,405
3	$568	$300	$268	$49,104
4	$568	$302	$266	$48,803
5	$568	$303	$264	$48,499
6	$568	$305	$263	$48,194
7	$568	$307	$261	$47,888
8	$568	$308	$259	$47,579
9	$568	$310	$258	$47,269
10	$568	$312	$256	$46,958
11	$568	$313	$254	$46,644
12	$568	$315	$253	$46,329

What is EMI?

An Equated Monthly Instalment (EMI) is a fixed amount you pay to your lender every month until the loan is fully repaid. Each payment covers both the interest accrued for the month and a portion of the principal. As the loan balance reduces over time (under the reducing balance method), the interest component decreases while the principal component increases — keeping the monthly EMI constant throughout.

arrow_backGeneral EMI Calculator

Why use our online Education Loan EMI Calculator?

Estimate monthly repayments on your student or education loan and plan your finances before the moratorium period ends. Supports variable interest rates and flexible tenures.

How to use Education Loan EMI Calculator

1
Enter the education loan amount
Type or slide to set the loan amount. The tool defaults to $50,000 — typical for a graduate programme in the US. Adjust based on your total programme cost minus scholarships and grants.
2
Enter the interest rate
Federal student loan rates in the US range from ~5–8%. Private student loans vary from 4–15%+ depending on credit. Enter the exact rate from your loan offer letter.
3
Set the repayment tenure
Enter the active repayment period — not the total loan duration. Standard repayment plans run 10 years; extended plans go up to 25 years. The grace period after graduation is typically 6 months before repayment begins.
4
Review total interest payable
Check the total interest payable against your loan principal. Interest that accrues during school (on unsubsidized loans) can significantly increase your total repayment amount if not paid during studies.
5
Simulate prepayment after graduation
Use the Prepayment Simulator to see how applying a signing bonus or salary surplus in your first years of employment dramatically cuts remaining interest and loan tenure.

Federal vs private student loans — the key differences

Federal student loans (US) are funded by the government and carry rights and protections that private loans do not. They offer income-driven repayment plans that cap monthly payments at 5–10% of discretionary income, Public Service Loan Forgiveness (forgiveness after 10 years of payments while working for a qualifying employer), deferment and forbearance options in cases of financial hardship, and fixed interest rates set by Congress annually.

Private student loans are issued by banks, credit unions, and lenders like Sallie Mae or Earnest. They have none of the federal protections and limited flexibility if your financial situation changes. However, creditworthy borrowers (or those with a creditworthy co-signer) can sometimes obtain rates lower than federal PLUS loan rates (which were approximately 9% for graduate students in 2024–2025).

The standard advice: exhaust federal loan eligibility before considering private loans. Federal loans should be accepted in order: subsidized loans first (interest does not accrue during school), then unsubsidized, then PLUS loans last. Private loans should be a last resort for the gap between federal limits and actual costs.

Income-driven repayment — how it works and when to use it

Income-driven repayment (IDR) plans cap your monthly federal student loan payment as a percentage of your discretionary income — typically 5–10% — regardless of how much you borrowed. After 20–25 years of qualifying payments (10 years under PSLF for qualifying employers), any remaining balance is forgiven.

The four main federal IDR plans are SAVE (the newest, replacing REPAYE), PAYE, IBR, and ICR. SAVE is currently the most generous for most borrowers: monthly payments are capped at 5% of discretionary income for undergraduate loans and 10% for graduate loans. If your payment doesn't cover the full interest accruing each month, the government covers the shortfall — preventing balance growth despite low payments.

IDR is most valuable for borrowers with high debt relative to income — teachers, social workers, government employees, and others in public-sector careers. For borrowers who earn more than their debt-to-income ratio suggests (doctors, engineers early in career), the standard 10-year plan typically results in lower total interest paid. Use the IDR calculator on studentaid.gov to compare plans for your specific situation.

Interest capitalization — the hidden cost of student loan deferral

Interest capitalization occurs when accrued but unpaid interest is added to your loan principal. Once capitalized, you pay interest on the higher principal — meaning you are paying interest on interest. For unsubsidized federal loans, interest begins accruing the day funds are disbursed, including during your time in school and the 6-month grace period after graduation.

Example: A $20,000 unsubsidized loan at 6.5% that is not paid for 4 years of school plus 6 months of grace period accrues approximately $5,850 in interest. When repayment begins and this interest capitalizes, your new principal is $25,850 — and all future interest calculations are based on this higher amount.

Strategies to limit capitalization: pay the interest on unsubsidized loans while in school (even small monthly payments eliminate capitalization entirely). Under the SAVE plan, the government covers unpaid interest each month, preventing capitalization for enrolled borrowers on that plan. If possible, refinance high-rate private loans after graduation once you have a stable income and strong credit score.

Frequently Asked Questions

What is the interest rate for student loans?: As of 2025, US federal student loan rates are set annually: approximately 6.5% for undergraduates, 8% for graduate students, and 9% for PLUS loans. Private student loan rates range from 4–15%+ depending on the lender and your (or your co-signer's) credit score. Federal loans offer fixed rates and income-driven repayment options; private loans may have variable rates that can increase over time.
What is a grace period for student loans?: A grace period is a window after leaving school (graduation, dropping below half-time enrollment, or withdrawal) during which you are not required to make loan payments. Federal student loans typically have a 6-month grace period. Interest may still accrue on unsubsidized loans during this time and is added to your principal balance (capitalized) when repayment begins.
What expenses does an education loan cover?: Student loans can cover tuition and fees, room and board (on or off campus), textbooks and supplies, transportation, and personal expenses — up to your school's official Cost of Attendance (COA). Amounts above the COA cannot be borrowed. Private loans may be less flexible in what they cover; check with your lender before borrowing.
Is student loan interest tax-deductible?: In the US, you can deduct up to $2,500 of student loan interest per year on your federal income tax return under the Student Loan Interest Deduction, subject to income limits. The deduction phases out at higher incomes (check current IRS thresholds). This deduction is available even if you don't itemize. Other countries have similar schemes — check your local tax authority for details.
Can I pay off a student loan early?: Yes — federal and most private student loans in the US allow early payoff without penalty. Extra payments reduce your principal, which lowers the interest that accrues each month. You can direct extra payments toward the highest-rate loan first (avalanche method) for maximum savings. Use the Prepayment Simulator on this page to see exactly how many months and how much interest you save with a one-time extra payment.