Student Loan Calculator
The student loan calculator estimates your monthly payment and total repayment cost based on your loan balance, interest rate, repayment term, and grace period. Interest that accrues during the grace period is added to the balance before repayment begins, a process called capitalization — this calculator accounts for that effect.
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Formula
Capitalized Balance = L × (1 + r)^g; Monthly Payment = CB × [r(1+r)^n] / [(1+r)^n − 1]
L is the original loan amount. r is the monthly interest rate (annual rate ÷ 12). g is the grace period in months. The capitalized balance is the original balance compounded through the grace period — interest accrues but isn't paid. Repayment then uses this higher balance, with n being the number of monthly payments (years × 12).
How to use the Student Loan Calculator
- 1
Enter your loan amount
Value should be in $.
- 2
Enter your interest rate
Value should be in %.
- 3
Enter your repayment term
Value should be in years.
- 4
Enter your grace period
Value should be in months.
- 5
Read your results instantly
Results update in real time as you type.
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How student loan interest capitalizes
Most federal student loans enter a 6-month grace period after graduation before repayment begins. During this period, interest continues to accrue on unsubsidized loans. At the end of the grace period, this accrued interest is capitalized — added to the principal balance — which is why your repayment balance is higher than what you originally borrowed.
Subsidized loans (for undergraduate students who demonstrate financial need) have a critical advantage: the government pays the interest during school, grace periods, and certain deferment periods. For a $20,000 subsidized loan, your repayment balance is still $20,000 after graduation. For an unsubsidized loan, six months of accrued interest (roughly $650 at 6.5%) is added before you make your first payment.
For large loan balances, capitalization is significant. A $50,000 unsubsidized loan at 6.5% accrues about $1,625 during a 6-month grace period — raising your repayment balance to $51,625 and increasing every future payment as a result.
Federal vs. private student loan repayment options
Federal student loans offer repayment flexibility that private loans typically don't. Income-driven repayment (IDR) plans — including SAVE, IBR, PAYE, and ICR — cap your monthly payment at a percentage of your discretionary income (typically 5-10% for undergrad loans). After 20-25 years of qualifying payments, any remaining balance may be forgiven.
Public Service Loan Forgiveness (PSLF) forgives the remaining balance after 10 years of qualifying payments while working full-time for a government or eligible nonprofit employer. For high-balance borrowers in public service, PSLF can be worth hundreds of thousands of dollars in forgiveness.
Private student loans, in contrast, are standard amortizing loans with no income-based options, no forgiveness programs, and no government protections during financial hardship. If you have both federal and private loans, prioritize keeping federal loans in repayment first during financial difficulty.
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Refinancing: when it makes sense
Refinancing consolidates one or more student loans into a new private loan, ideally at a lower interest rate. This can meaningfully reduce total interest paid — refinancing $40,000 at 7.5% to 5% saves over $8,000 in interest over 10 years. However, refinancing federal loans into a private loan permanently eliminates access to income-driven repayment, PSLF, and federal forbearance programs.
Refinancing makes the most sense when: you have private loans (no federal protections to lose), your credit score and income have improved significantly since borrowing, your career path doesn't qualify for PSLF, and interest rates available to you are meaningfully lower than your current rates.
If you're pursuing PSLF or have high loan balances relative to income, do not refinance federal loans under any circumstances — the forgiveness value typically dwarfs the interest savings from refinancing.
Tips & Insights
Pay interest during the grace period
Making interest-only payments on unsubsidized loans during the grace period prevents capitalization. On a $30,000 loan at 6.5%, paying the ~$163/month in accruing interest during a 6-month grace period prevents $975 from being added to your balance — reducing every future payment slightly and saving more in long-run interest than the $975 itself.
Explore income-driven repayment before struggling
If your monthly payment is unmanageable relative to your income, switch to an income-driven repayment plan proactively — before missing payments. Missing payments damages your credit and may cause default. IDR payments can be as low as $0 for borrowers with very low income, and still count toward PSLF forgiveness.
Apply extra payments to the highest-rate loan
If you have multiple student loans, extra payments should go toward the loan with the highest interest rate (the avalanche method) to minimize total interest paid over the life of all loans. Use automatic minimum payments on all loans, then direct any extra funds to the highest-rate balance. The savings over a 10-year repayment period can be substantial.
Worked Examples
Standard 10-year federal loan repayment
A $32,000 loan at 6.5% with a 6-month grace period and 10-year repayment has a monthly payment of approximately $368, with total repayment of about $44,200 — meaning roughly $12,200 is interest, including interest capitalized during the grace period.
Extended repayment on large balance
A $75,000 loan at 7% repaid over 20 years has a monthly payment of about $601 after grace period capitalization. Total repayment is roughly $144,200 — nearly double the original balance, with about $69,200 in total interest charges.
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Frequently Asked Questions
What is the difference between subsidized and unsubsidized student loans?
Subsidized federal loans are available to undergraduates who demonstrate financial need. The government pays the interest while you're in school at least half-time, during the grace period, and during approved deferment. Unsubsidized loans are available to most students regardless of need, but interest accrues immediately from disbursement. Over a 4-year degree, unpaid interest on unsubsidized loans adds meaningfully to your total balance.
What happens if I can't afford my student loan payments?
For federal loans, contact your loan servicer immediately. Options include switching to an income-driven repayment plan (which can lower payments to as little as $0), applying for deferment (if you're unemployed or returning to school), or requesting forbearance (temporary pause, but interest continues to accrue). Defaulting on federal loans triggers severe consequences including wage garnishment and loss of tax refunds — never let loans go delinquent without exploring these options first.
Is Public Service Loan Forgiveness worth pursuing?
PSLF forgives the remaining balance on federal direct loans after 10 years (120 qualifying monthly payments) while working full-time for an eligible employer (government, 501(c)(3) nonprofits, certain other public service employers). For borrowers with balances over $50,000 in public service careers, PSLF can be worth hundreds of thousands of dollars in forgiveness — far exceeding any income premium from private sector work. Submit the annual Employment Certification Form to track progress.
Should I pay off student loans or invest?
If your loan interest rate is below 6%, many financial advisors suggest investing in a diversified portfolio (especially in tax-advantaged accounts) rather than aggressively paying down loans, since expected investment returns may exceed the loan cost. Above 7-8%, paying down loans typically beats investing in bonds and approaches equity return territory. The psychological value of being debt-free is also real and valid — a purely mathematical approach isn't always the right one.
How does refinancing affect my repayment options?
Refinancing federal loans into a private loan permanently eliminates access to income-driven repayment, PSLF, federal forbearance, and other federal protections. This trade-off is acceptable if you have stable high income, don't qualify for PSLF, and the rate reduction is significant (1%+ typically). Refinancing private loans into a new private loan carries no such trade-off — it's always worth seeking a lower rate on private debt.
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