Student Loan Payment Calculator
Estimate the monthly payment on a student loan after a grace period of unsubsidised interest accrual, using the standard amortising-loan formula. Useful for budgeting your post-graduation finances and comparing repayment plans of different lengths.
Last updated: May 2026
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About this calculator
The calculator first capitalises the initial loan balance by accruing unpaid interest during the grace period (the months between graduation and first payment, typically 6 months for federal Stafford loans), then computes the standard fixed monthly payment using the amortising-loan formula: M = P_grace × r × (1+r)^n / (1+r)^n, where P_grace = loanAmount × (1 + r)^gracePeriod is the balance after grace-period interest accrual, r = annual rate / 100 / 12 is the monthly interest rate, and n = loanTerm × 12 is the total number of monthly payments. The grace-period capitalisation models unsubsidised loans where interest accrues during the grace period and is added to principal at first payment; for subsidised loans (less common), interest doesn't accrue during grace and the calculator would over-estimate. Variables: loanAmount is the current principal at graduation in dollars; interestRate is the annual rate as a percentage (typical federal student loan rates 2025: ~5.5–8.05% depending on loan type and year); loanTerm is the repayment length (10/15/20/25 years); gracePeriod is the number of months of grace before payments begin (typically 6 for federal Stafford). Edge cases: a very long term (25 years) lowers monthly payment but dramatically increases total interest; conversely, the 10-year standard repayment minimises total interest. For federal loans, income-driven repayment (IDR) plans set payments at 10–20% of discretionary income and forgive remaining balance after 20–25 years (or 10 years under Public Service Loan Forgiveness); those plans have very different math from this calculator. Private student loans typically have shorter terms (5–15 years) and don't offer IDR. The calculator does not include origination fees, deferment effects, or any loan-forgiveness scenarios.
How to use
Example 1 — Standard federal undergraduate loan. $25,000 in unsubsidised Stafford loans at 5.5% over 10 years with a 6-month grace period. Enter Loan Amount = 25000, Interest Rate = 5.5, Loan Term = 10 years, Grace Period = 6. Monthly rate r = 0.055/12 ≈ 0.004583; n = 120; grace capitalisation: 25000 × (1.004583)^6 ≈ 25,693. Payment M = 25,693 × 0.004583 × (1.004583)^120 / ((1.004583)^120 − 1) ≈ $279/month. ✓ Over 10 years: total paid ≈ $33,500, with ~$8,500 in interest. The 6-month grace period costs you ~$700 in capitalised interest before payments even start. Example 2 — Stretching to 20 years. Same $25,000 at 5.5% but 20-year term. Enter 25000, 5.5, 20 years, 6. Monthly payment ≈ $176 — much lower monthly cash flow. But total paid over 20 years ≈ $42,300, so total interest ≈ $17,300, more than double the 10-year option. The longer term cuts monthly payment by ~$100 but adds ~$8,800 in lifetime interest cost. For most borrowers, the 10-year standard plan is the cheapest; the longer terms are an affordability accommodation, not a financial optimisation. Income-driven plans can offer even lower payments based on income but require annual recertification and may have tax implications on forgiven balances.
Frequently asked questions
What is the difference between subsidised and unsubsidised student loans?
Federal Direct Subsidised Loans (available only to undergraduate students with demonstrated financial need) do not accrue interest while you're in school at least half-time, during the 6-month grace period after graduation, or during deferment periods — the government pays the interest. Unsubsidised Loans (available to all undergraduate and graduate students regardless of need) accrue interest from disbursement, including during school, grace periods, and deferments. If you don't pay the interest as it accrues on unsubsidised loans, it capitalises (gets added to principal) when repayment begins, increasing the balance you'll pay interest on going forward. The calculator models this capitalisation. For 2025 federal loans, the limits for subsidised loans are lower than unsubsidised, so most borrowers have some of each type. Always pay accruing interest on unsubsidised loans while in school if you can afford it — even small monthly payments prevent the capitalisation that significantly increases lifetime cost.
What are income-driven repayment plans and when should I use one?
Income-Driven Repayment (IDR) plans cap your monthly federal student loan payment at 10–20% of your discretionary income (income above a threshold tied to federal poverty guidelines). Federal options include IBR (Income-Based Repayment), PAYE (Pay As You Earn), SAVE (formerly REPAYE), and ICR (Income-Contingent Repayment). After 20 or 25 years of qualifying payments, any remaining balance is forgiven — though forgiven amounts may be taxable as income depending on tax law at forgiveness time. Public Service Loan Forgiveness (PSLF) shortens this to 10 years (120 payments) for borrowers working full-time at qualifying public-service employers (government, 501(c)(3) non-profits). Use IDR when standard 10-year payments would exceed ~10% of your income, you work in public service, or you expect your income to grow substantially (low payments now, more later). Disadvantages: longer total repayment, often more total interest paid, annual income recertification required, and uncertainty about future tax treatment of forgiven balances.
How can I reduce total interest paid on student loans?
Several strategies. (1) Pay accrued interest during school and grace periods on unsubsidised loans, preventing capitalisation. Even $25/month prevents thousands in capitalised interest over 4+ years. (2) Choose the shortest term you can afford; the 10-year standard plan minimises total interest among amortising plans, though it has the highest monthly payment. (3) Make extra principal payments when possible — federal loans don't have prepayment penalties, and any extra goes directly to principal (after instructing the servicer not to advance the due date). (4) Consider refinancing through a private lender for a lower rate IF you have stable income, excellent credit, and don't need federal protections (income-driven repayment, forbearance, PSLF). Private refinancing typically lowers rates by 1–3 points for qualified borrowers. (5) For federal loans, the 0.25% auto-pay interest rate reduction saves modest amounts over the life of the loan. (6) Pursue PSLF if you work in qualifying public-service employment.
What are the most common mistakes managing student loans?
The first is letting interest capitalise unnecessarily — not paying accruing interest on unsubsidised loans during school and grace periods means thousands in extra principal at repayment start. The second is choosing the longest repayment term to minimise monthly cost without recognising the massive total interest increase. The third is refinancing federal loans to private without considering the loss of federal protections (income-driven repayment, deferment, forgiveness, death/disability discharge) — once refinanced to private, those options are gone permanently. The fourth is failing to recertify annually for income-driven repayment, which causes payments to default to the standard plan (often much higher) and may end PSLF eligibility. The fifth is ignoring the difference between subsidised and unsubsidised loans and treating them the same. The sixth is paying minimum on student loans while carrying high-interest credit-card debt — credit card rates (20%+) far exceed student loan rates (5–8%), so paying down credit cards first usually wins financially.
When should I not use this calculator?
Skip it for income-driven repayment plans; those calculate payments from your income, not from a fixed amortisation, and use very different math. Don't use it for loans with variable interest rates (some private student loans); the rate changes over time and the fixed-rate amortisation formula misrepresents the true cost. It's the wrong tool for federal loans being considered for forgiveness (PSLF, IDR forgiveness, teacher loan forgiveness); the relevant question is qualifying payments and remaining balance after the forgiveness threshold, not monthly amortisation. Avoid it for loans currently in deferment, forbearance, or rehabilitation — those have specific rules about interest accrual and payment recalculation that this calculator doesn't model. Finally, for international student loans or non-US student lending (different tax treatment, government guarantees, repayment structures), country-specific calculators are more appropriate.