Home Loans Student Loan Calculator | Interest Calculator & How to Calculate

Student Loan Calculator | Interest Calculator & How to Calculate

For many students, pursuing higher education is a life-changing experience loaded with chances for personal and professional development. The cost of schooling, on the other hand, might be a substantial financial hardship. Student loan calculators have become vital tools for assisting students in making educated decisions about borrowing for college. These online resources can help you understand loan repayment, interest costs, and budgeting. In this post, we will look at the importance of student loan calculators, how they work, and the advantages they provide to borrowers.

Understanding Student Loan Calculators

A student loan calculator is an online financial tool designed to estimate and analyze the costs associated with borrowing for higher education. These calculators consider various factors, such as loan amount, interest rate, repayment term, and type of loan, to provide borrowers with comprehensive insights into their financial obligations.

How Student Loan Calculators Work

Student loan calculators typically require the following inputs:

  1. Loan Amount: The total amount you plan to borrow for your education.
  2. Interest Rate: The annual interest rate at which your loan will accrue interest. For federal student loans, the interest rates are set by the government, while private loans’ rates are determined by the lender’s policies and your creditworthiness.
  3. Repayment Term: The length of time over which you will repay the loan. Common terms are 10 years, 15 years, or 20 years.
  4. Type of Loan: Indicate whether the loan is a federal or private loan, as interest rates and terms may vary.

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Benefits of Student Loan Calculators

Student loan calculators offer a range of benefits that empower borrowers to make informed financial decisions:

1. Loan Repayment Estimations: Calculators provide estimated monthly payments based on the loan amount, interest rate, and repayment term. This helps borrowers plan their budgets and understand the financial commitment associated with the loan.

2. Interest Cost Analysis: By entering the interest rate, borrowers can see the total interest cost over the life of the loan. This insight encourages borrowers to consider strategies to minimize interest expenses, such as making extra payments.

3. Comparison of Repayment Plans: Some calculators offer the option to compare different repayment plans, such as standard, extended, or income-driven plans. This helps borrowers identify the most suitable plan for their financial situation.

4. Early Repayment Analysis: Many student loan calculators allow borrowers to assess the impact of making extra payments. By inputting additional payments, borrowers can determine how these payments affect the loan term and total interest paid.

5. Pre-Borrowing Decision Making: Prospective students can use loan calculators before borrowing to estimate their future loan repayments. This enables them to make more informed decisions about their educational expenses and potential loan amounts.

6. Affordability Assessment: Loan calculators help borrowers determine whether they can comfortably afford the monthly loan payments based on their income and other financial commitments.

How to Use the Student Loan Calculator

To begin, you’ll need to enter your student loan amount, interest rate, loan term and any additional payments you plan to make. If you have more than one student loan, enter each loan’s details separately—this may mean recalculating multiple times. You’ll then see your expected monthly payment and full payment schedule over time.

Loan Amount

Enter the total amount of your loan, rounded to the nearest dollar. The amount you borrowed may vary depending on the type of loan you have. First-year undergraduates can borrow a maximum of $5,500 in federal student loans, while those with private loans can often borrow up to the total cost of their school’s attendance.

Interest Rate

Enter the precise interest rate on your loan—a difference of half a percentage point can result in thousands of extra dollars paid, depending on the size and repayment term of your loan.

All federal student loans come with fixed interest rates, which will never change over the life of your debt. Private student loans, however, usually let you choose between fixed or variable interest rates. While fixed rates are static, variable rates can rise and fall based on certain economic benchmarks.

If you have variable-rate loans, enter your current interest rate into the calculator. But know that your results will only be a general estimate—if your rates shift significantly in the future, the total cost of your loan will change accordingly.

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Loan Term

Enter the number of years you have to repay your loan. For federal student loans, the standard repayment term is 10 years, though under some repayment plans you can take 20 to 30 years to repay your debt. Federal student loans allow you to change your repayment plan at any time, but doing so will affect the total cost of your loan.

Private student loan terms vary by lender, and you typically select your desired term before you finalize the loan. It’s common to see private loan terms that range from five to 20 years. In general, the shorter your loan term, the higher your monthly payments—but you’ll pay less in interest by paying your loan more quickly.

Additional Payment

If you plan to make extra payments regularly, enter that amount in the appropriate field. An additional payment is anything extra you can pay over the monthly minimum amount due. Paying just $50 extra each month could save you thousands of dollars in interest.

If you plan to make extra payments, confirm with your loan servicer how the extra cash will be applied. Servicers first apply payments to any accrued interest; what’s left over goes towards paying down the loan’s principal balance. If you want to make sure your extra payments go directly to your loan balance, you may need to request that from your lender. Additionally, you could request that any extra cash is paid towards your highest-interest loan first.

Some lenders allow you to select these preferences on their website, while others may require you to call and make your request through a representative.

Interpret Your Results

After you’ve made your calculations, you can view your estimated monthly payments, total interest costs, total amount paid and the month and year you’ll be debt-free.

You can also view your annual or monthly amortization schedule. This details how your payments are split between interest costs and paying down the principal balance. When you first start paying off your loans, a significant portion of your money goes towards interest payments. As your loan balance shrinks over time, less interest accrues and an increasing amount of your monthly payments will go towards your principal balance instead.

How to Apply for Student Loans

The application process for federal and private student loans varies drastically. For federal student loans, you must submit the Free Application for Federal Student Aid (FAFSA) for each year you attend school. This form determines your eligibility for all federal student aid, including loans and grants.

Most undergraduates will need to submit personal and financial information for both themselves and their parents. Once your FAFSA is processed, you’ll receive a report that details your expected family contribution—that is, how much the Department of Education has determined your family can afford to pay for college. Your school will use this information to calculate your aid, and you can select any federal student loans you’ve qualified for.

Private student loans are a bit simpler to apply for. First, research potential lenders and compare several factors, including the available interest rates, loan terms, applicable fees, how much you can borrow and how the lender can help if you later have trouble making payments. Many lenders allow you to prequalify, which estimates the interest rates you are likely to be offered.

Once you’ve narrowed down your list of desired lenders, you can submit an application. To gain approval, most lenders require you to have good credit and a stable income. If you can’t qualify on your own, consider adding a co-signer to your application. A co-signer is equally responsible for your debt, but if they’re highly qualified they can help you get the lowest interest rates on offer.


Student loan calculators are valuable tools that provide borrowers with financial clarity and help them make responsible decisions about their educational financing. By using these calculators, borrowers can estimate their loan repayments, understand the long-term cost of borrowing, and explore repayment options. Armed with this information, students and graduates can embark on their academic and professional journeys with confidence, knowing they have a clear understanding of their financial obligations and a plan to manage their student loans responsibly. As the educational landscape evolves, these calculators will continue to play a crucial role in empowering borrowers to make informed choices about their financial futures.

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Student Loan Frequent Ask Question

What types of student loans are there?

The two types of student loans available are federal loans, provided by the federal government, and private student loans, made by financial institutions like banks and credit unions. Federal student loans typically come with lower interest rates and more consumer protections than private loans. So it’s best to borrow those up to the maximum allowed, if necessary, before considering private loans.

How much should I borrow in student loans?

Borrow as little as possible while still ensuring you’ll have enough funding to finish your studies as planned. Some experts suggest borrowing no more than you expect to earn your first year working full-time after college. So if the average starting salary in your field is $40,000, plan to take out no more than $40,000 in student loans total throughout your college education.

What will my repayment schedule be?

Your repayment term, or the amount of time it takes to pay off student loans, depends on the type of loan you took out and the payoff plan you choose. Federal student loans come with a standard repayment term of 10 years, but you can opt for a 20- or 25-year term if you choose an income-driven repayment plan, which ties monthly payments to your income. Private loans often come with terms of five, 10 or 15 years.

Can I get my loans forgiven?

In some circumstances, your student loans may be discharged before your repayment term ends. For example, for federal loan borrowers, if you make 120 on-time loan payments while working full-time for the government or a qualifying nonprofit, you could get your loans forgiven through the Public Service Loan ForgivenessProgram.

What happens to student loans when you die?

If you borrowed federal student loans, your debt will be discharged if you die. For parent PLUS loans, the debt can be discharged if either the parent or the student who benefited from the loan dies.

If you die while paying off private student loans, it’s more complicated. Many private lenders will discharge the loan if the borrower dies, but not all lenders offer this—check your lender’s policy to be sure. However, if the loan is co-signed and the primary borrower dies, the co-signer may still be required to pay off the debt in some cases.

For private loans made after 2018, the co-signer cannot be held responsible for the debt if the primary borrower dies, thanks to the Economic Growth, Regulatory Relief, and Consumer Protection Act.

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