What the Student Loan Calculator does
A student loan is repaid the same way as any fixed-rate instalment loan: a fixed monthly payment that gradually clears both the interest and the principal over an agreed number of years. This calculator takes three numbers — the amount you borrowed, the annual interest rate and the repayment term — and returns your fixed monthly payment, the total you will pay over the life of the loan, the total interest cost, and a full month-by-month amortisation schedule you can scroll through.
It works for federal loans on the Standard Repayment Plan and for private loans, in any currency. If you are comparing a longer or shorter term, or a refinanced rate against your current one, change the inputs and every figure updates instantly.
How the payment is calculated
Repayment uses the standard declining-balance (actuarial) amortisation formula. Each month, interest is charged on the outstanding balance, your fixed payment covers that interest first, and whatever is left reduces the principal. Because the balance shrinks every month, the interest portion of each payment falls and the principal portion rises — so the loan reaches exactly zero on the final payment.
M = P · i · (1 + i)^n / ((1 + i)^n − 1)
- M — the fixed monthly payment
- P — the principal (the amount you borrowed)
- i — the monthly interest rate = annual rate ÷ 12
- n — the total number of payments = years × 12
When the rate is 0%, the formula would divide by zero, so the payment simply becomes P ÷ n — the principal split into equal instalments with no interest at all. The same declining-balance maths powers our Amortization Calculator and EMI Calculator, so the figures are consistent across every loan tool on the site.
Worked example — $30,000 at 5% over 10 years
These figures are produced by the same engine that powers the calculator above, so they can never drift from what you see on screen.
| Step | Value |
|---|---|
| Loan amount (P) | $30,000.00 |
| Annual interest rate | 5% |
| Term | 10 years (n = 120 payments) |
| Monthly rate (i = 5% ÷ 12) | 0.4167% |
| Monthly payment (M) | $318.20 |
| Total paid over 10 years | $38,183.59 |
| Total interest | $8,183.59 |
In the very first month, interest is $30,000 × 0.4167% = $125.00, so of the $318.20 payment, $193.20 goes to principal. By the final month almost the entire payment is principal — that is the declining-balance mechanic at work.
How the term changes the total cost
A longer term lowers the monthly payment but increases the total interest, because you owe the balance for longer. The table below holds the loan at $30,000 and the rate at 5%, varying only the repayment term.
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 5 years | $566.14 | $3,968.22 | $33,968.22 |
| 10 years | $318.20 | $8,183.59 | $38,183.59 |
| 15 years | $237.24 | $12,702.86 | $42,702.86 |
| 20 years | $197.99 | $17,516.81 | $47,516.81 |
If a lower monthly payment is unavoidable, remember that federal loans carry no prepayment penalty — you can pay the longer-term minimum when money is tight and overpay when it is not. Model the savings from overpaying with our Loan Payoff Calculator, and if you are juggling higher-rate debt alongside your loan, the Credit Card Payoff Calculator helps you decide which balance to attack first.
Federal vs private student loans
The maths is identical, but the protections are not. Federal loans (U.S. Direct Loans) offer income-driven repayment, deferment, forbearance and forgiveness programmes such as PSLF; private loans generally offer none of these. Refinancing a federal loan into a private one can lower your rate but permanently forfeits those protections — weigh the interest saved against what you give up.
Federal repayment plans at a glance
Federal borrowers on the Standard Plan pay the least total interest, but income-driven plans exist for those who need a lower monthly payment. The landscape changed in 2026: the SAVE plan was vacated by a federal court in March 2026, PAYE and ICR are being terminated effective July 2028, and the new Repayment Assistance Plan (RAP) launches July 1, 2026 for new borrowers. The table below covers the plans available as of mid-2026.
| Plan | Term | Payment basis | Forgiveness |
|---|---|---|---|
| Standard | 10 years | Fixed equal payments | None |
| Graduated | 10 years | Starts low, rises every 2 years | None |
| Extended | Up to 25 years | Fixed or graduated; requires $30,000+ in Direct Loans | None |
| Income-Based (IBR) | 20–25 years | 10–15% of discretionary income | After 20–25 years |
| Repayment Assistance Plan (RAP) | 30 years | 1–10% of AGI (new borrowers, July 2026+) | After 30 years |
This calculator models the Standard Plan — the fixed-payment case where every month’s payment is the same. Because repayment plans change frequently, always verify your options at studentaid.gov before enrolling. If you are on an income-driven plan, the Loan Payoff Calculator can show how extra payments shorten the path to forgiveness eligibility.
Assumptions and limitations
- Assumes a fully-amortising, fixed-rate loan with a constant monthly payment; variable-rate private loans are not modelled.
- The periodic rate is the nominal annual rate ÷ 12 — the standard servicer convention.
- No fees, capitalised interest, in-school accrual, deferment, forbearance, grace-period interest or prepayments are included in the base figures.
- Income-driven repayment plans (SAVE/IBR/PAYE/ICR) and forgiveness (PSLF) are outside the scope of a standard payment calculator.
- Results are estimates; a servicer’s figures may differ by a few cents because the final payment is usually adjusted so the balance lands at exactly zero.
Frequently asked questions
How is the monthly student loan payment calculated?+
The standard formula is M = P × i × (1+i)^n ÷ ((1+i)^n − 1), where P is the loan principal, i is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). This is the same declining-balance (actuarial) amortisation formula used by all loan servicers.
What is the U.S. federal Standard Repayment Plan?+
The Standard Repayment Plan is the default for most federal student loans. It sets a fixed monthly payment over 10 years (120 payments), which means you pay the least total interest of any federal repayment option. You can pay it off early with no prepayment penalty.
What is the difference between subsidised and unsubsidised federal student loans?+
Subsidised loans do not accrue interest while you are enrolled at least half-time, during the grace period, or in deferment — the government pays the interest. Unsubsidised loans accrue interest from disbursement; unpaid accrued interest capitalises (is added to the principal) when repayment begins. This calculator models only the repayment phase and does not account for in-school accrual.
How do income-driven repayment plans (IDR) work, and why does this calculator not show them?+
Income-driven plans (SAVE, IBR, PAYE, ICR) cap your payment at a percentage of your discretionary income rather than amortising the balance over a fixed term. The resulting payment can be lower than the interest accruing, so the balance may grow. Modelling IDR requires income, family size and tax-filing data and is beyond the scope of a standard payment calculator.
What does capitalisation of interest mean on a student loan?+
Capitalisation occurs when accrued, unpaid interest is added to your loan principal. After capitalisation, future interest is calculated on the larger balance, increasing the total amount you repay. Common capitalisation events include graduating, leaving school, entering repayment after a grace period, or exiting an income-driven plan.
How much can I save by making extra payments on my student loan?+
Any extra payment above the required monthly amount goes directly toward reducing your principal, which shrinks the interest accruing every subsequent period. Even an extra 50–100 per month on a 10-year loan can save hundreds to thousands in interest and cut the repayment term by one to two years. Use the extra-payment scenario in our Loan Payoff Calculator to model the savings precisely.
What is Public Service Loan Forgiveness (PSLF)?+
PSLF forgives the remaining balance on eligible Direct Loans after 120 qualifying monthly payments under an income-driven plan while employed full-time by a qualifying public-service employer (government or non-profit). The calculator shows the standard-plan payment; PSLF borrowers typically choose an IDR plan to minimise payments and maximise the forgiven amount.
Should I pay off student loans or invest the extra money?+
The classic rule of thumb is: if your loan interest rate is higher than the expected after-tax return on your investment, pay the loan first; if lower, consider investing the difference. Federal student loan rates (roughly 5–8% for 2024–25) sit close to long-run equity returns, so the answer depends on your tax situation, risk tolerance and whether you have employer-matched retirement contributions (match = guaranteed 100% return).
What is the interest rate on federal student loans for 2025–26?+
Federal student loan rates are set each May by Congress, tied to the 10-year Treasury note plus a fixed add-on. For loans first disbursed July 1, 2025 – June 30, 2026: Direct Subsidised/Unsubsidised (undergrad) 6.39%, Direct Unsubsidised (graduate) 7.94%, Direct PLUS (parent/grad) 8.94%. Private loan rates vary by lender and your credit profile. These rates apply only to newly disbursed loans — existing loans keep the rate in place when they were disbursed.
Does enrolling in autopay lower my student loan interest rate?+
Yes. For federal Direct Loans disbursed on or after July 1, 2012, the U.S. Department of Education temporarily increased the autopay interest-rate discount from 0.25% to 1.00%, effective July 1, 2026 through June 30, 2028 — you must be enrolled by September 30, 2026 to qualify. Many private lenders also offer an autopay discount, typically 0.25%. Over a 10-year term on a $30,000 loan, even a 0.25% rate reduction saves roughly $400 in total interest.
How does refinancing a student loan affect total interest paid?+
Refinancing replaces one or more existing loans with a new private loan, ideally at a lower interest rate. A lower rate reduces both the monthly payment and total interest paid. However, refinancing federal loans into a private loan permanently forfeits federal protections — income-driven repayment, deferment, PSLF and federal forgiveness options. Use the rate and term fields to compare your current loan against a hypothetical refinanced loan.
Disclaimer
Sources
- CFPB — What is amortization?
- Federal Student Aid — Standard Repayment Plan
- Wikipedia — Amortization calculator
- Federal Student Aid Partners — Direct Loan Interest Rates 2025–26
- U.S. Department of Education — Autopay Interest Rate Reduction Announcement
Formula and data last reviewed by the TheCalculatorVault team on 4 July 2026. Figures are for general information, not professional advice.
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