I repaid rs 34000/- towards my educational loan so far this year. How can I calculate the interest paid towards the loan as that is the amount which can be used for tax rebate? when I asked the bank for tax certificate, they simply add up the interest charged to the account in the year which I think is wrong as the rebate is for the interest paid and not the interest charged.Please help.
How Is The Interest Paid On Educational Loan Calculated From The Repayment?
January 25th, 2010 by Home Loans Leave a reply »
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I have done income taxes many years and don’t know about any rebates on Educational Loans but in general when financial institutions calculate compounded interest expenses on all LOANS and money borrowed, they set up what is know as AMORTIZATION SCHEDULE on that particular loan that requires information like sum of how much money was borrowed, exact date or month, specific interest rate and term of loan etc.
Then from this AMORTIZATION SCHEDULE, you know the PRINCIPAL: amount currently owed which with every payment, the bigger share is normally applied to n pay the interest and the balance applied towards the principal and which graduallys gets smaller until ZERO at final payment. The below spreadsheet should help you greatly bec individuals occasionally do make/apply ADDITIONAL FUNDS toward the principal balance remaining so the interest calculation will have a smaller base. Then normally at the end of a tax year, financial institutions will distrubute the total sum of interest paid monthly during the past 12 months etc http://www.score.org/downloads/Loan%20Am…
Hope the Above Info Helps!
What country are you in and what bank are you at? Depends a lot of those 2 things.