Student Loan Calculator

How This Calculator Works

Most student loans don’t require payments while you’re in school — but unless the loan is subsidized, interest keeps accruing the whole time, and it gets added to your principal the moment repayment begins. Enter your loan amount, interest rate, how many months you’ll be deferred (in school plus any grace period), and your repayment term, and this calculator finds your monthly payment once real repayment starts.

This is the one thing genuinely unique to student loans that a general Loan Calculator doesn’t model: a deferment period where interest builds up without being paid, followed by capitalization — the accrued interest gets folded into your principal, so you end up paying interest on that interest for the rest of the loan.

The Formula

$$\vD{\text{Interest Accrued During Deferment}} = \vA{\text{Loan Amount}} \times \vB{\text{Interest Rate}} \times (\vC{\text{Deferred Months}} \div 12)$$ $$\text{Capitalized Principal} = \vA{\text{Loan Amount}} + \vD{\text{Interest Accrued During Deferment}}$$

From there, the monthly payment uses the same standard amortization formula as any fixed-rate loan, applied to the capitalized principal instead of the original loan amount.

Worked Example

A $30,000 loan at 5% interest, 48 months deferred (4 years in school), then a 10-year repayment term:

1. Interest accrued during deferment: $\vA{\$30{,}000} \times \vB{5\%} \times 4 = \vD{\$6{,}000}$.
2. Capitalized principal once repayment begins: $\vA{\$30{,}000} + \vD{\$6{,}000} = \$36{,}000$.
3. Monthly payment on that capitalized amount: ≈ $381.84.
4. Total interest paid during the 10-year repayment: ≈ $9,820.

Common Mistakes

• Not distinguishing subsidized from unsubsidized interest accrual. Subsidized federal loans don’t accrue interest while in school; unsubsidized loans do — this calculator models the unsubsidized case (interest accruing during deferment), which overstates the deferment interest for a fully subsidized loan.
• Forgetting capitalized interest becomes part of the principal. Once deferment ends, accrued interest is typically added to the loan balance — future interest is then charged on that larger amount, not just the original amount borrowed.
• Assuming standard repayment is the only option. Income-Driven Repayment plans can produce a very different monthly payment and payoff timeline than the standard fixed schedule modeled here — check your loan servicer’s own options if IDR might apply to you.