How student loan repayment is calculated
A student loan on a standard repayment plan is an ordinary amortizing loan: you owe a balance, interest is charged each month on whatever balance remains, and a fixed monthly payment is set so that the balance reaches exactly zero on the final payment of the term. Early payments are mostly interest, because the balance is at its largest; later payments are mostly principal. This calculator applies that exact formula to your balance, rate and term, and shows the three numbers that define the loan's real weight in your budget: the monthly payment, the total interest over the whole repayment, and the total amount repaid. For a general-purpose version of the same math, or to model extra payments, see the Loan Calculator; to fold several debts into one payoff plan, the Debt Payoff Calculator is the next step.
The student loan payment formula
Where P is the loan balance, r is the monthly interest rate (the yearly rate divided by 12 and by 100), and n is the number of monthly payments in the term. If the rate is zero, the payment is simply P ÷ n. The formula is used at full precision with no rounding along the way — only the displayed payment is rounded to cents — which is why the default example below lands exactly on the standard figure for its inputs.
The term is a trade-off, not a detail
Stretching the term is the easiest way to lower a monthly payment and the most expensive way to borrow. A longer term means more months in which interest is charged on a balance that is falling more slowly, so the total interest climbs even as the monthly figure relaxes. On the default loan — $30,000 at 5% — the ten-year plan costs about $8,183.59 of interest in total. Halve the term to five years and the payment rises sharply, but the interest falls to roughly half that amount; double the term, where a plan allows it, and the interest bill grows by well over half again while the payment drops by far less than half. The practical reading of this page is therefore not just the payment it shows, but the comparison between two runs: set the term you are offered, read the total interest, then set the shortest term your budget could survive and read it again. That difference is the true price of the lower monthly payment.
Worked example
Borrow $30,000 at 5% and repay over 10 years. The monthly rate is 5 ÷ 12 ÷ 100, and the term is 120 payments. The formula gives a monthly payment of $318.20. Across the 120 payments you repay $38,183.59 in total: the original $30,000 plus $8,183.59 of interest — roughly $273 of interest for every $1,000 borrowed. Notice what that means for extra payments, even though this page keeps the plan standard: any month in which you pay more than $318.20, the surplus comes straight off the balance, every following month's interest is charged on a smaller amount, and the loan ends early. The standard-plan figures here are the baseline that any payoff strategy has to beat.
Several loans, several rates
Many borrowers hold more than one student loan — different loans for different years, sometimes at different rates, sometimes with different servicers. Each loan amortizes independently, so the honest way to use this calculator is one loan at a time: run each balance at its own rate over its own remaining term, then add the monthly payments together for your true monthly total, and add the interest figures for your true total cost. Borrowers with a single combined or consolidated loan can simply enter the combined balance and its rate once. Either way, if you are choosing which loan to attack with spare cash, the one with the highest rate is almost always the right target: a dollar of principal removed from the most expensive loan prevents the most future interest.
Worked example
A $30,000 student loan at 5% repaid over 10 years costs $318.20 a month for 120 months — $38,183.59 repaid in total, of which $8,183.59 is interest. Shorten the term in the calculator and watch the interest fall much faster than the payment rises.
How to use this calculator
- Enter the loan balance still owed — for several separate loans, run each one individually and add the results.
- Enter the loan's yearly interest rate exactly as it appears on your statement.
- Enter the repayment term in years — ten years is the standard plan many borrowers start on.
- Read the monthly payment, then the total interest: that second figure is the real cost of the term you chose.
- Run the calculator again with a shorter term to see how much interest a higher payment would avoid, before deciding what your budget can carry.
Plans and pauses this calculator does not model
Real student loan systems — the US federal system in particular — offer arrangements beyond the standard plan: payments linked to income, graduated payments that rise over time, deferment and forbearance pauses, and forgiveness provisions for some borrowers and careers. Those arrangements change the payment, the term, or both, in ways that depend on your income, employer and loan type, so no honest general calculator can fold them into three input fields. What this page gives you is the standard-plan baseline, which remains useful in every case: it is the benchmark against which an income-driven payment can be compared, and it shows what happens to interest if payments ever fall below the monthly interest charge — the balance grows instead of shrinking, a situation worth recognising the moment it appears on a statement.
Interest capitalization: the quiet cost of a pause
When payments are paused — during school, a grace period or deferment — interest usually keeps accruing on the balance. When the pause ends, that unpaid interest is often capitalized: added to the principal, so from then on you pay interest on the interest. It is the mirror image of the extra-payment effect, and it is why two borrowers with the same original loan can owe noticeably different amounts by the time repayment begins. If you are still in a grace or in-school period, running this calculator with your current balance, rather than the amount you originally borrowed, is the simple way to keep the projection honest.