Student Loan Calculator
Calculate student loan payments including interest that accrues while you're still in school, plus the time and interest an extra monthly payment saves.
How to use this calculator
- 1Enter the loan amount, rate, and how long until repayment actually starts (years left in school plus the grace period).
- 2Toggle capitalization based on your loan type — unsubsidized loans typically capitalize, subsidized loans do not accrue interest at all during this period.
- 3Add an extra monthly payment to see how much time and interest it saves versus the standard schedule.
How the calculation works
Accrued interest = Principal × monthly rate × months of deferment. Payment = Annuity(Principal + accrued interest if capitalized, rate, term)- Deferment
- Time in school plus the grace period after — no payments are due, but interest often still accrues
- Capitalization
- Folding accrued interest into the principal, so future interest is charged on a larger balance
This is exactly why unsubsidized loans end up costing noticeably more than the amount originally borrowed suggests — every semester in school adds interest that then itself earns interest for the entire repayment period once capitalized.
Subsidized federal loans do not accrue interest during school or the grace period, which is the specific benefit of that loan type — for those, set years in school and grace period to 0 to model correctly.
Worked example
$30,000 loan, 6.5%, 2 years left in school, 6-month grace, 10-year repayment
- 1.Deferment: 2 years in school + 6 months grace = 30 months.
- 2.Accrued interest: $30,000 × (6.5%/12) × 30 = $4,875.00.
- 3.Capitalized balance at repayment: $30,000 + $4,875.00 = $34,875.00.
- 4.Monthly payment on $34,875.00 at 6.5% over 10 years: $396.00.
Result: $396.00 a month, starting after 2 years 6 months
The same loan, paying an extra $100 a month
- 1.The required payment is still $396.00, but $496.00 is actually paid each month.
- 2.At $496.00 a month, the $34,875.00 balance clears in 89 payments instead of 120 — 2 years 7 months sooner.
- 3.Total interest falls from $12,644.73 to $9,144.43, a saving of $3,500.30 for $100 more a month over a shorter span.
Result: Debt-free in 7 years 5 months, saving $3,500.30 in interest
Subsidized vs unsubsidized loans
US federal student loans split into two types that behave very differently while a borrower is still in school. Subsidized loans, available to undergraduates who demonstrate financial need, do not accrue interest while the student is enrolled at least half-time or during the grace period — the government covers it. Unsubsidized loans, available to both undergraduate and graduate borrowers regardless of financial need, start accruing interest from the day the money is disbursed, whether or not any payments are being made. Knowing which type of loan is which changes the entire calculation modeled here — for a subsidized loan, set years in school and the grace period to zero, since no interest is accruing during that window.
What happens before the first payment is due
The stretch between taking out the loan and making the first payment has two distinct phases. In-school deferment covers the time actually enrolled, and a grace period — typically six months for US federal loans — follows after leaving school, giving a new graduate time to find employment before payments begin. For an unsubsidized loan, interest accrues quietly through both phases. What happens to that accrued interest at the end depends on capitalization.
Repayment plan options
Once repayment starts, borrowers of US federal loans generally have several structures to choose from, each trading off monthly payment size against total interest and time in repayment.
- Standard repayment — a fixed payment over a set term, commonly 10 years — the lowest total interest of the federal options, at the highest fixed monthly payment.
- Graduated repayment — starts lower and increases every couple of years, aimed at borrowers expecting rising income — costs more in total interest than the standard plan.
- Extended repayment — stretches the term well beyond 10 years for borrowers with larger balances, lowering the monthly payment at the cost of substantially more interest over time.
- Income-driven repayment — sets the required payment as a share of income and family size rather than the loan balance, with any remaining balance forgiven after a set number of years. The specific plans on offer, their formulas and their forgiveness timelines have changed more than once in recent years, so current federal guidance is worth checking directly rather than assuming a fixed set of rules.
- Private refinancing — replaces one or more loans with a new private loan, potentially at a lower rate for borrowers with strong credit — but it permanently forfeits federal protections like income-driven plans and loan forgiveness programs, since those are federal-loan features only.
Strategies that reduce total cost
A few concrete moves change how much a student loan ultimately costs, independent of which repayment plan is chosen.
- Pay interest during school if at all possible — on an unsubsidized loan, even small payments while still enrolled prevent that interest from capitalizing later, which is one of the highest-value, lowest-effort moves available.
- Minimize capitalization events — each time unpaid interest gets folded into the principal — typically at the end of deferment, a grace period, or forbearance — future interest starts being charged on that larger balance, compounding the cost.
- Check for employer repayment assistance — a small but growing number of US employers offer a student loan repayment benefit as part of compensation, which functions as a direct reduction in the effective cost of the loan.
What this assumes, and where it stops
Assumptions
- Interest accrues at a constant rate throughout deferment — federal loans in practice accrue daily, which this monthly approximation tracks closely.
Limitations
- Does not model income-driven repayment plans, which base payments on income rather than a fixed amortization schedule and can substantially change both payment size and total cost.
- Loan forgiveness programs are not modelled.
Common questions
What is loan capitalization, and why does it matter so much?
It is the point where unpaid accrued interest gets added to your principal balance, after which you pay interest on that interest for the rest of the loan. It typically happens when you leave school, at the end of a grace period, or after a deferment or forbearance ends — minimizing how many times capitalization happens is one of the few concrete levers borrowers have over total cost.
Should I pay interest while still in school if I can?
On an unsubsidized loan, paying even small amounts during school prevents that interest from capitalizing later — it is one of the highest-value moves available, since it directly reduces the balance interest gets charged on for the entire repayment period, without requiring a large sum.
Is extra payment better than paying interest during school?
Both attack the same problem — interest that compounds against you — but at different stages. Paying during school prevents capitalization on a smaller balance; an extra monthly payment during repayment shrinks a balance that has already capitalized. If you can only do one, preventing capitalization first is usually the higher-value move, but any extra dollar toward a student loan before its term ends saves the same interest an extra dollar would on any other fixed-rate amortizing loan.
Sources
- Federal student loan interest and capitalization — US Federal Student Aid
Formula and content last reviewed on .
Results are estimates for information only, not professional advice.
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