Student Loan Calculator
As more than 50% of students preferring education loan over self-funding, there is a vital need for assessing factors related to education loan which helps in choosing the right and most appropriate loan scheme. These factors are: –
- Sufficient loan amount required
- Appropriate ROI
- Suitable Tenure
- Loan scheme and company
Student Loan Calculator is the answer to most of the questions regarding the purchase of education loan. student loan calculator tool is nowadays available on the website of almost every financial company dealing in student education loan. Working of a student loan calculator is sometimes becomes very confusing as it asks the user to fill in details in many combinations to derive at a desired result.
So following is the guide to use student loan calculator to facilitate students in decision making of the education loan: –
How to use the student loan calculator?
EMI CalculatorEMI calculation is the most basic function of the Student Loan calculator. EMI is the equal monthly instalment which has to be paid by the applicant or the co-applicant in the form of interest. After the loan amount and the rate of interest is decided upon, the student can use the Student Loan calculator tool to calculate the EMI according to the following formulae:-
EMI = [Loan amount*ROI percentage]/(Tenure*12)
*Loan amount refers to the initial amount disbursed by the applicant
Following is an example of the same.
Loan Amount: 1,500,000 ROI*: 12.5 Tenure: 5 years
Disbursed Amount: 1,000,000
EMI = [1,000,000*12.5%]/(5*12)
EMI = Rs. 2,083(rounded off)
*EMI is calculated on the basis of Simple Interest
The applicant or the co-applicant has to start paying the EMI as and when disbursement has been undertaken.
ELIGIBILITY CHECKERThis part of the student loan calculator tool lets the user check whether his/her credentials are good enough for any lending company to offer the desired loan amount. Here credentials refer to the difference between the monthly interest amount calculated on education loan and the monthly income of the co-applicant less any other monthly loan EMIs.
Loan would be applicable for only following cases: –
Simple Interest EMI should be less than 50% of the salary after deducting other monthly loan amounts.
SIEMI < (50% Salary-other EMIs)
E.g. Salary 40000, other EMIs
ROI CALCULATORAn important feature of the student loan calculator is to calculate the nearest rate of interest at which company would provide the student education loan. ROI is one of the decisive factors in making a decision for or against a loan scheme or company.
Following are the factors considered by a student loan calculator in calculating the ROI: –
- College Category – It ranges from category A to D.
- CIBIL score of the applicant and the Co-applicant.
- Sponsor location
E.g. For a college above B+ category, 12% ROI may be possible to be levied by the lending company if CIBIL score of the sponsor i.e. co-applicant is above 750.