Work out an education loan properly: semester releases, simple interest during the course, the moratorium, and what servicing the interest saves you.
Do I pay anything while I am still studying?
Nothing is compulsory. That is what the moratorium means: no EMI until the course ends plus six or twelve months. But interest is still accruing the whole time, and if you leave it alone it gets added to your principal, so you then pay interest on it for the next fifteen years.
Is it worth paying the interest during the course?
Almost always. In the worked example about ₹10,292 a month during the course saves ₹7,57,302 over the life of the loan. Part of that is avoiding capitalisation and part is the rate concession many lenders give for servicing. If a parent can cover it, it is the highest-return payment in the whole loan.
Why is the interest less than I expected?
Because the bank has not given you the whole loan yet. Fees are released a semester at a time, so the first tranche accrues for five years and the last for eighteen months. Only about a third of the sanctioned amount is outstanding for the full period, which is why the real figure is far below the rate times the sanction.
What is the moratorium exactly?
The course period plus a grace period, usually six months or one year after it ends, or until you find a job, whichever comes first. Lenders differ, so change the field to match your sanction letter. The longer the moratorium, the more interest accrues before repayment starts.
Can I claim the interest against tax?
Yes, under section 80E, and there is no upper limit on the amount. The deduction runs for eight years from the year you start repaying, or until the interest is fully paid, whichever comes first. Only the interest qualifies, not the principal, and only under the old regime.
What about a government interest subsidy?
Some schemes meet the course-period interest for students under an income threshold. This page has a switch for it, but it does not check whether you qualify: eligibility depends on family income, the institution, and the scheme in force when you borrowed. Confirm with the lender before planning around it.