EMI Calculation Formula: EMI = P × r × (1+r)^n / ((1+r)^n - 1). For Indian education loans: 9% annual, 7-year repayment = 84 months.
Realistic EMI Table (9%, 7-year): ₹5L → ₹8,037/month, total ₹7.75L. ₹10L → ₹16,074, total ₹15.50L. ₹15L → ₹24,111, total ₹23.25L. ₹20L → ₹32,148, total ₹31.00L. ₹25L → ₹40,185, total ₹38.75L. ₹30L → ₹48,222, total ₹46.50L. ₹50L → ₹80,370, total ₹77.50L. ₹75L → ₹1,20,555/month, total ₹1.16Cr.
Note on Interest During Moratorium: During 4-year course + 1-year moratorium (5 years), interest accumulates. Principal × (1.09^5) = Principal × 1.54.
Take-Home vs EMI Stress Test (Take-home ~70% of gross): ₹6L gross → ₹35K take-home, ₹15L EMI ₹24K = 69% (severe). ₹10L gross → ₹58K, ₹15L EMI = 41% (manageable). ₹15L gross → ₹85K, ₹25L EMI ₹40K = 47% (high). ₹15L gross, ₹50L EMI ₹80K = 94% (impossible).
Safe Loan-to-Salary Ratio: Standard — EMI < 30% of take-home. Year-1 ₹4L → safe ₹5L, stretch ₹6.5L. Year-1 ₹10L → safe ₹13-15L, stretch ₹17-20L. Year-1 ₹15L → safe ₹20-25L, stretch ₹30L. Year-1 ₹25L → safe ₹40-45L, stretch ₹50L.
Loan Selection Strategy: ₹10-20L — SBI Scholar Loan or Canara Vidya Turant. ₹20-35L — SBI primary; ICICI backup. ₹35-50L+ — SBI for bulk + ICICI/Avanse for gap.
Loan Prepayment: First 3 years aggressive prepayment from any salary surplus. Government banks waive prepayment penalty.
Tax Benefits Section 80E: Education loan interest fully tax-deductible. 8 years from start of repayment.