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Student Loan Calculator — Your Real Payment After Deferment

Estimate your student loan payment the honest way — by accounting for the interest that builds up during school deferment or your grace period and capitalizes onto your balance before repayment begins. Enter your loan amount, rate, term, and any deferment to see your real monthly payment and total interest.

Your numbers

$

The total amount disbursed (borrowed) before any deferment interest.

%

Your annual rate, e.g. 6. Grad and PLUS loans run higher.

yr

Repayment period in years; standard federal repayment is 10.

mo

Months before repayment starts. Interest accrues and capitalizes. Use 0 for none.

Results

Monthly payment$353.05
Interest accrued in deferment$1,800.00
Balance at repayment$31,800.00
Total interest$12,365.42
Total of payments$42,365.42
Number of payments120

A student loan is rarely repaid on the amount you originally borrowed. Because interest builds up while you are still in school, during your grace period, and through any deferment, that unpaid interest gets capitalized — added to your principal — the moment repayment begins. From then on you pay interest on a bigger balance. This calculator models that step explicitly so the monthly payment you see reflects what you’ll truly owe, not an optimistic figure based on the day-one balance.

What capitalization does to your balance

On unsubsidized federal loans, Grad PLUS loans, and most private loans, interest accrues from the day the money is disbursed. If you don’t pay that interest as it accrues, it sits and waits. When your grace period or deferment ends, the lender capitalizes it — rolls it into your principal — and recalculates your payment on the larger amount. Subsidized federal loans are the exception: the government covers interest during qualifying deferment, so for those you can set the deferment field to 0.

We accrue deferment interest as simple interest — principal × rate × time — matching the federal “interest = principal × rate × time” disclosure, then amortize the new, capitalized balance over your repayment term using the same EMI engine behind every loan tool on WorthAxis.

A worked example

Take a $30,000 unsubsidized loan at 6%, repaid over the standard 10 years (120 months), with a 12-month grace/deferment period before repayment starts:

  • Interest accrued in deferment: $1,800 ($30,000 × 6% × 1 year)
  • Balance at repayment: $31,800 ($30,000 + $1,800 capitalized)
  • Monthly payment: about $353.05 (computed on the $31,800, not the original $30,000)
  • Total interest: about $12,365.42 (deferment-accrued plus repayment interest)
  • Total of payments: about $42,365.42

Set deferment to 0 and the payment drops to about $333.06 on the original $30,000 — the roughly $20/month difference is the cost of letting interest capitalize. Over ten years, that’s why even small in-school interest payments pay off.

How to cut what your student loans cost

  • Pay interest before it capitalizes. Even modest interest-only payments while in school or during the grace period stop the balance from growing. Set deferment to 0 to model this.
  • Mind grad-school math. Grad PLUS and unsubsidized graduate loans carry higher rates and more years in school, so capitalization compounds. Enter your full disbursed total and every month until repayment to see the real number.
  • Consider refinancing — carefully. A lower rate or shorter term can cut total interest, but refinancing federal loans into a private loan forfeits income-driven repayment, deferment, and forgiveness. Compare your current terms here before giving those up.
  • Shorten the term if you can. A shorter repayment term raises the monthly payment but cuts total interest sharply. Try 5 or 7 years against the standard 10 to see the trade-off.

Reading your results

Use the monthly payment to check the loan fits your post-graduation budget, the balance at repayment to see how much capitalization added, and the total interest to compare offers or refinance quotes. If two loans show the same payment, the one with the shorter term almost always costs less overall.

Estimates are for planning only and assume simple-interest accrual during a single deferment window with one capitalization event; actual federal and private terms vary. Your loan servicer’s figures are authoritative — see our disclaimer.

Frequently asked questions

What is student loan interest capitalization?
Capitalization is when unpaid interest is added to your principal balance. On unsubsidized federal and most private loans, interest accrues while you are in school, during the grace period, and during deferment. When repayment begins, that accrued interest is "capitalized" — folded into your principal — so you then pay interest on a larger balance. This calculator accrues simple interest over your deferment months and adds it to the principal before working out your payment.
How does deferment or a grace period raise my payment?
During deferment or the six-month post-graduation grace period, you usually are not required to make payments, but interest on unsubsidized loans keeps accruing. Because that interest capitalizes onto your principal, you end up borrowing more than you originally received. For example, $30,000 at 6% deferred for 12 months capitalizes $1,800 in interest, so repayment is calculated on $31,800 — raising both the monthly payment and the lifetime interest.
How is this different for grad school loans?
Grad and professional students typically rely on unsubsidized Direct and Grad PLUS loans, which accrue interest from the day they are disbursed and carry higher rates than undergraduate loans. With several years in school plus a grace period before repayment, capitalization can add thousands to the balance. Enter your total disbursed amount and the full months until repayment starts to see the capitalized effect.
Can paying interest during school avoid capitalization?
Yes. If you pay the interest as it accrues during school, deferment, or the grace period, there is nothing left to capitalize, and your principal stays at the original amount. Even small interest-only payments while in school meaningfully cut your long-term cost. To model that, set the deferment months to 0, since paying interest as it accrues leaves no balance to capitalize.
Should I refinance my student loans?
Refinancing replaces one or more loans with a new private loan at a new rate and term — potentially lowering your payment or total interest if your credit and income have improved. The trade-off is that refinancing federal loans into a private loan forfeits federal protections like income-driven repayment, deferment, and forgiveness. Compare your current rate and term against a refinance quote here, but weigh the lost federal benefits before switching.

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