Your education loan, explained.

Education loan · Tapti Vidya Loan · Tapti Bank Ltd · ••••7302

Illustrative

Education loan · India · Bank

Sanction20 Jun

Interest building up

₹83,250

added to the loan on 30 Jun 2030

Paid out

₹2,00,000

of ₹4,00,000 sanctioned

EMIs start

30 Jun 2030

in 44 months

EMI

₹3,627

for 120 months, on what's paid out so far

50% of the loan paid out₹2,00,000 still to come

An education loan of ₹4,00,000 from Tapti Bank Ltd at 9.25% a year (floating), for study in India. Interest builds up while studying (about ₹83,250) and is added to the loan; EMIs start on 30 Jun 2030 and run 120 months. The interest is tax-deductible for 8 years under the old regime.

Myra's most important observations

Interest while studying

Added to the loan

	Left to build up	Paid while studying (0.50% off)
Interest while studying	₹83,250	₹78,750
EMI after	₹3,627	₹2,507
Interest in all	₹2,35,183	₹1,79,534

This loan adds the interest when EMIs start. On the ₹2,00,000 paid out so far; later payouts add to both.

Tax on the interest

Estimate

FY 2030-31₹21,323
FY 2031-32₹24,005
FY 2032-33₹22,121
FY 2033-34₹20,056
FY 2034-35₹17,791
FY 2035-36₹15,308
FY 2036-37₹12,585
FY 2037-38₹9,599
Deductible in all₹1,42,789

Section 129: interest only, no cap, 8 years from the year you start paying interest, old regime only. Add your regime and slab to see the tax saved.

Government interest subsidies

Study in India · through banks

Family income you gave₹7,50,000
CSIS (all the interest while studying, income up to ₹4.5 lakh)Not eligible
PM-Vidyalaxmi (3% of it, income up to ₹8 lakh)₹27,000

Both pay only during the course and moratorium, for eligible courses and institutions, applied for through the bank and the PM-Vidyalaxmi portal; a student can't get both for one course.

If an EMI is missed

1–30 days

SMA-0

Reported to credit bureaus as overdue

31–60 days

SMA-1

Flagged as a special mention account

61–90 days

SMA-2

Last stage before it turns bad

Over 90 days

NPA

A non-performing asset; stays on the credit record

It shows on your parent's credit report too. A penalty for late payment must be a separate charge, not extra interest. Many banks restructure education loans for borrowers still looking for work; ask before 90 days.