Student Loan Calculator

How the payment is calculated

The scheduled payment comes from the standard amortization formula: M = P × i ÷ (1 − (1 + i)^−n), where P is the balance, i is the monthly rate and n is the number of payments. Interest is charged on the outstanding balance every month, so a 25-year plan spends far more of each payment on interest in the early years.

A $30,000 balance at 6.5% costs about $341 a month over 10 years, and about $203 a month over 25 years. The 25-year plan collects roughly $31,000 of interest against $11,000 on the 10-year plan.

Why the term matters more than the rate

A rate cut of half a percentage point is worth tens of dollars a month. Doubling the term is worth a hundred or more — which is why longer plans feel like relief. The interest column is the bill for that relief.

Extra payments attack the balance directly, and the saving compounds: $100 a month extra on a 10-year loan finishes it years early and removes interest that would otherwise have accrued on the whole remaining balance. The earlier the extra reaches principal, the more months of interest it cancels - which is why a small consistent extra beats an occasional large one.

What is not modelled

This is a fixed-rate, fully amortizing loan. Federal income-driven repayment (IDR) plans recalculate the payment from your income each year and can forgive a remaining balance after 20 to 25 years; Public Service Loan Forgiveness forgives the balance after 120 qualifying payments. Those programs are the main reason not to simply pick the shortest term.

Also excluded: subsidized deferment and forbearance (where the government pays interest), grace-period interest on unsubsidized loans, consolidation of several loans into a weighted-average rate, and any private-loan prepayment penalty.

Repayment plans and the forgiveness path

The plan you pick decides how much of your income the payment takes: the 10-year standard plan is the default federal plan, while income-driven repayment (IDR) plans recalculate the payment from your income each year and can forgive the remaining balance after 20 to 25 years. If forgiveness is the goal, a longer term is chosen for the outcome rather than the interest bill.

Public Service Loan Forgiveness forgives the balance after 120 qualifying payments, which is why stretching the plan can be the right move when those payments are in reach. None of this is modelled here, and neither is the deduction: US taxpayers can generally deduct up to $2,500 of student loan interest each year, subject to income phase-outs, on federal or private loans alike — a figure worth weighing against the extra interest a long plan accumulates.

Reading the payoff date, not just the payment

The comparison table holds the balance and the rate still while it changes the term, so the only thing moving from row to row is how long you take to repay. That is the honest way to weigh a 10-year standard plan against a 25-year extended one: the payment falls, and the total interest rises by the whole difference shown in the last column.

The extra-payment table works the other way round. It keeps the term you chose and adds a fixed amount every month, so each row is a different payoff date rather than a different contract. Twenty-five dollars a month looks like nothing next to a five-figure balance, but because that money goes to principal it also cancels every future interest charge on it, which is why the interest-saved column grows faster than the extra column.

The figure worth carrying to your servicer is the payoff date, because a repayment plan can move it. Put the payment you can actually afford next to the date it buys, and treat an income-driven plan or a forgiveness route as a separate decision, since neither of those is modelled in this arithmetic.