Please help me on this,

I want to go for masters for which I wish to take education loan of around 8.90 lakhs.Post my bachelors uptil now I had been working courtesy which I have saved 1.60 Lakh.
All banks give 1% interest concession on full tenure of education loan, if interest is serviced during study period which actually is repayment holiday/moratorium period.
I am in doubt if I should use some part of my savings to get 1%interest concession by servicing interest during moratorium period and rest of savings to minimize loan amount or I should use all of savings amount to minimize the loan amount and pay the loan back with original interest rate. Which one is a better deal? Would be glad if you can share the calculations involved in arriving at your conclusion.