Student Loan Calculator

What this calculator does

A student loan structured as a fixed-rate, fixed-term instalment loan amortises like any other amortising loan: a constant monthly payment splits between interest on the remaining balance and principal repayment, and the balance clears at the end of the term. This calculator takes three inputs (loan balance, annual interest rate, and repayment term in years) and returns the monthly payment, total interest across the term, and total amount paid. The math is the standard amortisation formula used for personal loans, mortgages, and any other fully-amortising fixed-rate loan.

The amortisation math

The monthly payment is M = P × i(1+i)^N ÷ ((1+i)^N − 1), where P is the loan balance, i is the monthly rate (the annual percentage divided by 1,200) and N is the number of monthly payments, twelve times the term in years. Total paid is M × N, and total interest is total paid minus the balance. Each payment covers the interest accrued on the outstanding balance first, and whatever is left reduces the principal. That split moves across the term: at the worked figures below the first payment of 388.57 breaks into 175.00 of interest and 213.57 of principal, and by the final payment the interest share has fallen to i ÷ (1 + i), which is 0.50% at 6% and depends on the rate alone rather than on the balance or the term. Whether the early payments are majority interest depends on the term. At 6% the first payment crosses into majority interest at a 12-year term; at 3% it takes 24 years, and at 10% only 7.

Worked example

Take a 35,000 student loan at 6% annual rate over a 10-year term. The monthly rate is 6 ÷ 12 = 0.5%. The formula produces a monthly payment of about 388.57. Total paid across 120 months is 46,628.61, so total interest is 11,628.61, about 33% of the original balance. Stretching the term to 20 years at the same rate drops the monthly payment to about 250.75 but raises total interest to about 25,180, more than double the 10-year figure.

The term-length trade-off

A shorter term raises the monthly payment and cuts the total interest. A longer term does the reverse. The mechanism is that interest each month is charged on whatever balance remains, so a schedule clearing the balance faster accrues fewer months of it. The calculator reports both figures because they move in opposite directions, and which of the two binds is a question about the borrower's circumstances rather than about the math.

What this calculator does not model

Income-contingent repayment systems exist in several jurisdictions, computing the monthly payment from the borrower's income above a threshold rather than from amortisation. Under those structures the monthly figure tracks earnings, the term is open-ended with a write-off after a fixed number of years, and total cost varies widely across borrowers holding the same nominal balance. This calculator models none of that. It assumes a fixed monthly payment under standard amortisation, so its output does not transfer to an income-contingent loan, and projections under those rules come from the loan servicer or the programme documentation.

The calculator also does not capture origination or arrangement fees (sometimes deducted from disbursement, sometimes added to principal), capitalised interest accrued during deferment or grace periods, late-payment fees, prepayment provisions, autopay or relationship discounts, or variable-rate loans where the rate moves during the term.

How to read the output

The monthly payment is what leaves the account each month, so it is the figure that has to fit a budget. Total interest is the price of the borrowing across the whole term, and it is the figure that carries weight when two offers differ in rate or in length. Total paid is the balance and the interest combined.