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Student Loan Calculator: Repayment, Interest and Extra Payments
Student loans often accrue interest while you study. Enter the amount borrowed, the rate, the months before repayment starts and how that interest is handled to see the payment and the total cost.
The two phases of a student loan
Many education loans have a study phase followed by a repayment phase. During study (and often a grace period afterwards) you may owe nothing monthly, but interest can still be charged. The calculator treats this as simple interest on the full amount: Interest = Amount × Rate × Months ÷ 12.
You then choose how that interest is handled. If it is added to the balance, repayment starts on a larger loan than you borrowed. If you pay it monthly, the repayment balance equals the amount borrowed. The repayment payment is the standard level payment on whichever balance applies.
Why unpaid interest raises the cost
Interest added to the balance is charged interest in turn. Borrowing 30,000 at 6% for four years of study builds up 7,200 of interest. If it is added to the balance, repayment starts at 37,200, and the extra 7,200 then bears interest for the whole repayment term. Paying only the interest while studying keeps the repayment balance at 30,000 and can reduce the total cost by thousands. Compare both settings above to see the gap for your own loan.
Even small payments during study help, because they stop the base from growing.
Rules vary by programme and country
Some governments and lenders pay or waive interest during study for certain loans, set rates by formula, link repayments to income, or forgive balances after a number of years. None of these features are modelled here, and this tool does not know which applies to you. For a loan with fixed instalments, the result shows the likely cost. For income-driven or subsidised programmes, use it only as a baseline and read the official terms.
- Check whether the rate is fixed or variable.
- Check when the first payment is due.
- Check whether prepaying is allowed without charge.
Paying it off faster
Extra payments reduce principal immediately, so every later month accrues less interest. Enter the amount above to see the saving. If you owe several debts, prioritise using the debt payoff calculator, and for the complete payment schedule of a loan see the amortization calculator. Always keep an emergency reserve before directing large sums to a loan with a modest rate.
Remember that the term you pick changes the answer a great deal. A ten-year plan on a 30,000 balance at 6% has a payment of roughly 333 on the original amount, while a twenty-year plan has a payment near 215 but more than doubles the interest. Try several terms and choose the shortest one whose payment you can sustain after other living costs.
Worked example
A 40,000 loan at 5.5%, four years of study with interest left unpaid, then a fifteen-year repayment with 50 extra each month.
Inputs
| Total amount borrowed | 40000 |
|---|---|
| Annual interest rate | 5.5 % |
| Months before repayment starts | 48 |
| Interest during that period | Unpaid and added to the balance at the start of repayment |
| Repayment term | 15 years |
| Extra payment each month during repayment | 50 |
Result
Starting after 48 months, for up to 180 months.
Interest that is added to the balance means you then pay interest on interest. Paying it monthly while studying avoids this.
| Balance when repayment starts | 48,800.00 |
|---|---|
| Interest arising before repayment | 8,800.00 (added to the balance) |
| Interest during repayment | 18,912.48 |
| Total interest on the loan | 27,712.48 |
| Total cost including the amount borrowed | 67,712.48 |
| Repayment length | 151 months |
| Interest saved by extra payments | 4,060.13 |
- Interest before repayment is modelled as simple interest on the full amount from day one. Loans disbursed in stages would accrue less.
Financial disclaimer: Results are estimates for planning and education. They are not financial, tax or legal advice. Fees, taxes, rates and rules vary by lender, product and country, so confirm figures with your provider or a qualified adviser before making decisions.
Frequently asked questions
How is a student loan payment calculated?
The balance at the start of repayment is spread over the repayment term with the standard level-payment formula. If interest built up during study and was added, the balance is higher than the amount borrowed.
Should I pay interest while I am still studying?
It lowers total cost, because unpaid interest is added to the balance and then earns more interest. Whether it is affordable depends on your budget.
Does this work for income-based repayment?
No. Income-driven plans have payments tied to earnings and sometimes forgive balances. This calculator assumes fixed monthly instalments.
What if I borrow a little each year?
Interest here is calculated as if everything were borrowed on day one, so the result is a cautious estimate. Staged loans accrue less interest.
Can I enter a grace period?
Yes. Add the grace months to the study months in the first field.
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References and sources
- Level-payment amortization and simple interest formulas from introductory finance texts.
- Consumer Financial Protection Bureau: educational guides on student loans. Link