Student Loan Repayment Calculator

Understanding the Student Loan Repayment Calculator

Student loan debt is a major financial consideration for many people. This calculator is designed to provide clarity on your repayment journey. It helps you see your standard monthly payment, and more importantly, it demonstrates how making extra payments can significantly reduce your total interest cost and help you become debt-free years sooner.

How It Works

The calculator compares two repayment scenarios based on your inputs:

• Loan Details: Your total loan balance, average interest rate, and original loan term establish the baseline for a standard repayment schedule.
• Extra Monthly Payment: This is the key variable for accelerating your payoff. Any amount you enter here is applied directly to your principal balance each month.

The Calculation and Its Impact

The tool first calculates your standard monthly payment using the amortization formula. It then recalculates the payoff timeline and total interest paid if you were to add your extra monthly payment. The results clearly display:

• Your new, higher monthly payment.
• Your new, earlier payoff date.
• The total interest saved, which is often a surprisingly large number, highlighting the powerful financial benefit of an accelerated payoff strategy.

By making extra payments, you reduce the principal balance faster. This means less interest accrues over the remaining life of the loan, saving you money and time.

Frequently Asked Questions