This calculator provides an estimate of monthly student loan payments. Actual payments may vary based on the interest rate at the time of repayment, the type of repayment program selected and other factors known only at the time of repayment. The actual amount of monthly payments will be provided to borrowers on a repayment schedule or a Truth-in-Lending disclosure, as applicable.
Student Loans and Interest
Student loans are different than car loans and mortgages because the majority of student loans allow you to defer repayment while you're attending school on at least a half-time basis. While this is a convenience if you are unable to make payments while attending classes, it also means that you could end up paying much more. Unpaid interest can capitalize (be added to) your principal balance and can significantly increase your loan balance from the time you take out a loan until you begin repayment.
For example, a $5,000 loan with a 6.00% interest rate accrues $300 in interest in one year. That may not seem like much, but if you take out that $5,000 loan your freshman year, do not take out any other loans and do not make interest payments while you're in school, that $5,000 loan can increase to a principal balance of more than $6,300 in four years because interest was charged on top of interest over time. (This example assumes interest is capitalized once per year.)
Learn more about interest and ways you can prevent your loan balance from increasing on the Supplemental Private Student Loans and Reduce Loan Costs pages.