Student Loan Calculator
See your monthly payments, total interest, and payoff timeline
Loan Details
Average undergraduate debt: $30,000
Federal loans: 4-7%, Private: 3-14%
Repayment Options
Quick Estimates
Monthly Payment
$0
Total Interest
$0
Total Cost
$0
Payoff Date
–
Payment Breakdown
First 12 Months Preview
| Month | Payment | Principal | Interest | Balance |
|---|
⚠️ Common Mistakes to Avoid
Don’t forget about interest capitalization (unpaid interest added to principal). Federal loans have different rates than private loans. Income-driven plans can lead to negative amortization if payments don’t cover interest.
Sample Loan Scenarios
| Loan Amount | Interest Rate | Term | Monthly Payment | Total Interest | Total Paid |
|---|---|---|---|---|---|
| $25,000 | 5.0% | 10 years | $265 | $6,800 | $31,800 |
| $40,000 | 6.5% | 15 years | $348 | $22,640 | $62,640 |
| $60,000 | 7.2% | 20 years | $472 | $53,280 | $113,280 |
Based on standard repayment plan. Interest compounds monthly.
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How Student Loan Calculations Work
Student loan payments are calculated using amortization formulas that spread your debt over time with interest. Understanding this calculation helps you make informed decisions about repayment strategies and loan options.
The Monthly Payment Formula
M = P × [r(1+r)^n] ÷ [(1+r)^n – 1]
Where M = monthly payment, P = principal loan amount, r = monthly interest rate (annual rate ÷ 12), and n = total number of payments (years × 12).
Here’s a step-by-step breakdown of how your monthly payment is determined:
- The annual interest rate is divided by 12 to get the monthly rate
- The total number of payments is calculated (years × 12 months)
- The formula distributes payments so that early payments cover more interest, while later payments cover more principal
- Each payment reduces your balance, which reduces future interest charges
- The process repeats until the loan is fully paid off
Understanding Different Repayment Plans
Federal student loans offer several repayment options, each with different implications for your monthly budget and total cost:
| Plan Type | Best For | Monthly Payment | Term Length | Total Interest |
|---|---|---|---|---|
| Standard | Most borrowers | Fixed | 10 years | Lowest overall |
| Graduated | Entry-level careers | Starts low, increases | 10 years | Higher than standard |
| Extended | High debt, moderate income | Fixed or graduated | 25 years | Highest overall |
| Income-Driven | Low income relative to debt | 10-20% of discretionary income | 20-25 years | Variable, may be forgiven |
Important Distinction: Federal vs Private Loans
Federal loans offer income-driven plans, forgiveness options, and fixed interest rates. Private loans typically offer only standard repayment with variable or fixed rates, and lack the protections of federal loans.
The Real Cost of Student Loan Interest
How Interest Accumulates
Student loan interest compounds daily in most cases. This means interest accrues on both your principal balance and any unpaid interest. For federal loans, unpaid interest may capitalize (be added to the principal) at specific times, increasing your total debt.
The Power of Early Payments
Making extra payments early in your loan term has a disproportionate impact on total interest saved. For example, an extra $50 per month on a $30,000 loan at 6% could save over $5,000 in interest and shorten your repayment by 3 years.
Interest During School and Grace Periods
Unsubsidized federal loans and all private loans accrue interest while you’re in school and during grace periods. This interest capitalizes (is added to your principal) when repayment begins, increasing your total cost.
Common Questions About Student Loans
Should I pay off student loans early?
It depends on your interest rate and other financial goals. If your loan interest is higher than what you’d earn investing, pay it off. If you have higher-interest debt (like credit cards), tackle that first. Generally, rates above 5% warrant aggressive repayment.
What’s the difference between fixed and variable rates?
Fixed rates stay the same for the entire loan term, providing predictable payments. Variable rates can change periodically (usually monthly or annually) based on market indexes. Variable rates often start lower but can increase over time.
How do income-driven repayment plans work?
Income-driven plans (IDR) set your monthly payment at 10-20% of your discretionary income. After 20-25 years of payments, any remaining balance may be forgiven (but may be taxed as income). These plans can lead to negative amortization if payments don’t cover interest.
What happens if I miss payments?
Federal loans enter delinquency after 1 missed payment and default after 270 days. Default leads to wage garnishment, tax refund seizure, and damaged credit. Private loans may default faster. Contact your servicer immediately if you’re struggling to make payments.
Strategies to Save on Student Loans
Pro Tip: The Avalanche Method
Pay minimums on all loans, then put extra money toward the loan with the highest interest rate. This mathematically saves the most money on interest over time compared to other strategies.
Effective strategies to reduce your student loan burden:
- Make biweekly payments: Instead of monthly, pay half your payment every two weeks (26 half-payments = 13 full payments yearly)
- Round up payments: If your payment is $327, pay $350
- Use windfalls strategically: Apply tax refunds, bonuses, or gifts directly to principal
- Consider refinancing: If you have good credit, you may qualify for lower rates with private lenders
- Auto-pay discounts: Many servicer offer 0.25% interest rate reduction for automatic payments
Federal Loan Forgiveness Programs
Public Service Loan Forgiveness (PSLF)
Forgives remaining balance after 120 qualifying monthly payments while working full-time for qualifying employers (government, non-profits). Must be on an income-driven repayment plan.
Teacher Loan Forgiveness
Up to $17,500 forgiveness for highly qualified teachers who work five consecutive years in low-income schools. Available for Federal Direct and FFEL Program loans.
Next Steps After Using This Calculator
Now that you understand your potential loan payments, here’s what to do next:
1. Create a Repayment Strategy
Based on your calculation, decide between aggressive repayment, income-driven plans, or pursuing forgiveness.
2. Research Refinancing Options
If you have good credit, compare rates from multiple lenders to potentially lower your interest rate.
3. Build a Budget
Incorporate your estimated payments into a monthly budget to ensure you can afford them post-graduation.
Disclaimer: This Student Loan Calculator provides estimates based on standard amortization formulas. Actual loan terms, interest rates, and repayment options may vary based on lender policies, creditworthiness, and specific loan agreements. Federal loan calculations assume standard repayment unless otherwise specified. This tool is for educational purposes only and does not constitute financial advice.