Education and Career Forum

Hello,
I am applying for an Education Loan and it is under process. I would like to know from which date the interest will be compounded? I mean from the date of taking Loan or after completing the course?

The rate of interest or the interest will be accounted from the date when the first installment of education loan is disbursed by the bank either to you or your institute. It will not account from the date of request or processing date. The interest will be accounted as simple interest for the entire study period upto six months after completion of the study course. After that it will get accounted as compound interest. The rate of interest is fixed by Reserve Bank of India.

For the duration of your study the rate of interest will be charged as simple interest.
Once you complete the course and six months gets passed after the completion of the course the interest rate will change to compound interest.
This is the rule in general regarding the interest charged by banks for Educational Loans.
The Loan will be charged from the day the Banks pays your first installment.