The majority of the study overseas aspirants are migrating to foreign countries in search of quality education and a high standard of living. International universities offer programs in almost all fields at bachelor, diploma, graduate certificates, master and PhD levels. Studying at a foreign university comes with a hefty cost attached to it. Hence, to finance an international degree from an overseas university, a lot of students avail of an overseas education loan for studying abroad. After availing of an overseas education loan, the repayment of the same begins once the student has secured a job i.e., after the completion of the moratorium period. Students are required to pay EMIs i.e., Equated Monthly Instalments during the repayment period of an education loan.
EMI stands for Equated Monthly Instalments, a monthly payment that is required to be made for the repayment of overseas education loans. EMI includes monthly contributions towards both principal and interest on the loan amount. In the initial stages of paying an EMI, the interest component constitutes the major portion and as the borrower progresses along the loan tenure, the portion of interest payment reduces and the contribution towards the principal repayment increases.
EMI can be simply explained as
EMI = Instalment of Principal Amount + Interest
For both secured overseas education loans and unsecured overseas education loans, students are required to repay the loan amount through the monthly EMIs, within the loan tenure.
The mathematical formula to calculate EMI is as follows:
EMI = P × r × (1 + r)n/((1 + r)n - 1)
where P denotes the loan amount, r denotes the interest rate, and n denotes loan tenure in the number of months.
The EMI of education loans for higher studies abroad majorly depends on the three main factors i.e., loan amount, interest rate and tenure of loan. Let us understand these three factors:
EMIs of overseas education loans can be calculated with the help of a tool called an EMI calculator. An applicant is required to add the principal amount, rate of interest and the loan tenure in the EMI calculator which helps the borrower in effectively visualizing the amount that is required to be paid to the financial institution.
On the specified date of each month, borrowers are required to pay the EMIs i.e., the one-time fixed payment amount to the financial institutions. One of the many benefits of equated monthly instalments is that the borrower is aware in advance of how much amount he/she is required to pay and for how long. This provides clarity to the borrower in knowing the amount required to pay each month towards their loan amount.
An overseas education aspirant has borrowed INR 2,000,000 at 10.3% of ROI and the student is required to repay the loan amount in the time span of 15 years i.e., 180 months. Hence, the student will be paying 22,000 every month. By the time the loan tenure of 15 years gets over, the loan amount will get double the principal amount. However, on reducing the repayment tenure of an overseas education loan to 10 years i.e., 120 months, the applicant will be required to pay around 27,000 every month and the total interest paid on the loan will be 38.2% of the total amount.
If we reduce the repayment loan tenure to 5 years, it can be observed that the EMI increases to INR 43,000 and the total interest paid reduces to 22.5% of the overall amount.
All of this is readily visualized in an EMI calculator tool by Elan Overseas Education Loans.
EMI Calculator available at the ÉLAN website is a user-friendly tool that helps to calculate the loan EMI with basic information like the loan amount, rate of interest and loan tenure. You will also get an estimate of the principal amount and the interest that occurred on the loan. Moreover, this tool also specifies the total annual balance as well. So, it’s a one-stop solution for your education loan EMI.
An EMI calculator is a tool that can help applicants in planning an overseas education loan effectively. It displays the EMI that will be required to be paid on a loan amount. Given below are the 4 benefits of using an EMI loan calculator:
Use the Simple, Convenient and Instant EMI calculator that makes complicated calculations simpler and get in touch with ELAN Loans for any kind.
What is an EMI?
EMI stands for Equated Monthly Instalments, a monthly payment that is required to be made for the repayment of overseas education loans. EMI includes monthly contributions towards both principal and interest on the loan amount.
When do I have to pay my EMI for the education loan?
Students are required to pay EMIs during the repayment period of an education loan.
What factors are important for EMIs?
The EMI of education loans for higher studies abroad majorly depends on the three main factors they are, loan amount, interest rate and tenure of the loan.
How can I calculate my EMI?
EMIs of overseas education loans can be calculated with the help of a tool called an EMI calculator.
How beneficial is using an EMI Calculator?
Some of the benefits of using an EMI loan calculator are better financial planning, easy comparison, easy to use, and maintaining a good credit history.
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