Student Loan Calculator

The standard amortized payment: P x r / (1 - (1 + r)^-n), where r is the yearly rate divided by 12 and n is the number of months. On an unsubsidized loan, interest during school or a grace period is added to the balance when repayment begins. On a subsidized loan the government pays it and the balance does not grow.

What is the difference between subsidized and unsubsidized loans?

On a subsidized federal loan the government pays the interest while you are in school, during the grace period and during deferment. On an unsubsidized loan that interest is charged to you and added to the balance when repayment starts, so you begin owing more than you borrowed.

Does paying extra actually help?

A lot, because extra money goes straight to principal. On a 30,000 dollar loan at 6.5 percent, an extra 100 dollars a month cuts roughly two and a half years and several thousand dollars of interest. Tell your servicer to apply extra to principal, not to advance your next due date.

Should I refinance my federal loans?

Only with care. A private refinance can lower the rate, but it permanently gives up income-driven repayment, forbearance protections, forgiveness programs and the death and disability discharge. For someone with a stable high income and no interest in forgiveness, it can be worth it. For most people it is not.

What is an income-driven repayment plan?

A federal plan that sets the payment as a share of your discretionary income rather than by the balance, with the remainder forgiven after 20 or 25 years. The payment can be far lower, and the total interest far higher. The rules change often enough that this page does not try to model them - check studentaid.gov for the current ones.

Is student loan interest deductible?

Up to 2,500 dollars a year, and it is an adjustment rather than an itemized deduction, so you get it even taking the standard deduction. It phases out at higher incomes. Your servicer sends form 1098-E.

Which loan should I pay off first?

If you have several, put every extra dollar on the highest rate while paying the minimum on the rest. That is mathematically fastest. The only good reason to do otherwise is if clearing one small loan entirely keeps you going.