Most banks charge simple interest during the course and moratorium (course + 6–12 months). Interest paid is deductible under section 80E for up to 8 years, in the old regime only.
FAQ
Is education loan interest tax-deductible?
Yes, under section 80E in the old regime, with no upper limit, for 8 years.
Sources (checked 6 Nov 2026): Income-tax Act; IBA model education loan scheme.