Interest starts on disbursement
Each instalment sent to the university starts accruing interest from that day, not from graduation.
Moratorium
Education Loan Moratorium Period Explained
The moratorium is the repayment holiday on an education loan: no EMIs while you study and for a short period after. Interest still builds up, so knowing how it works can save you lakhs.
- Course + 6–12 months
- Interest still accrues
- Paying interest early saves money
- Concession at many banks
Talk to an expert
Plan your repayment
A counsellor replies on WhatsApp with your checklist and next steps
Quick answer
Education Loan Moratorium Period Explained
The moratorium is usually the course duration plus 6–12 months (the IBA model scheme uses course + 1 year). You pay no EMI during this time, but interest accrues on every disbursement. Most banks charge simple interest during the moratorium and add it to the principal when EMIs start. Paying just the interest during the course keeps your EMI lower, and many banks offer a rate concession (often 1%) if you do.
Ask on WhatsAppUpdated · Reviewed by the Visa Edu Loans loan & visa desk
Official sources: IBA Model Education Loan Scheme (via your bank)
Example
What a ₹50 lakh loan costs during a 2-year MS
10% a year, simple interest, full amount disbursed at the start, 2.5-year moratorium. Real loans are disbursed in stages, so actual interest is lower.
Know this
Rules that catch families out
Moratorium ends early if you get a job
Some lenders end the moratorium when you start working, even before the scheduled date.
Compound interest at some NBFCs
Check whether interest is simple or compounded during the moratorium; it changes the total cost.
Partial interest payments
Many NBFCs ask for partial or full interest payments from the start. Check the sanction letter.
FAQs
Frequently asked questions
Still have a question?
Ask a counsellor directly — we reply on WhatsApp during working hours (Mon–Sat, 9 AM–6 PM IST).
Some lenders allow an extension for job search or further study on request, but interest continues. Ask before the moratorium ends.
At most public banks, no. Many NBFCs require partial or full interest payments during the course.
The deduction applies to interest actually paid in a tax year, so interest you pay during the course can count.
Explore
Keep exploring
Read next
Related pages
Loan guides
More education loan guides
- How Much Education Loan Can I Get to Study Abroad?
- Is a Co-Applicant Mandatory for an Education Loan?
- Education Loan Without a Co-Applicant for Abroad Studies
- Education Loan Interest Rates for Abroad Studies
- Education Loan Tax Benefit: Section 80E and Section 129
- Margin Money in Education Loans: How Much You Pay
- Education Loan Documents List for Abroad Studies
- Education Loan Process for Abroad Studies
- Education Loan Disbursement Process
- All loan guides
Talk to an expert
Talk to a counsellor today
Share your profile — we reply with a checklist and next steps. Expert consultations over call start at ₹355.
Mon–Sat, 9 AM–6 PM IST