Student Loan Payoff Calculator
Find your student loan debt-free date. Model how making extra payments can save you thousands in interest and shorten your repayment time.
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Enter your details and click Calculate.
Understanding Student Loan Payoff
How Student Loan Interest Works
Most student loans calculate interest daily based on your outstanding principal balance. When you make a payment, it's typically applied first to any outstanding fees (if applicable), then to the accrued interest, and finally to the principal balance. This process is called amortization. Have multiple loans? Compare payoff strategies with our Debt Snowball vs. Avalanche Calculator.
Because interest accrues daily, the sooner you pay down the principal, the less interest will accrue in the future. This is why making extra payments can have such a significant impact.
How This Calculator Works
This tool simulates the loan repayment month by month:
- It calculates the interest accrued for the month based on your current balance and the monthly interest rate (annual rate / 12).
- It subtracts the accrued interest from your total monthly payment (current payment + extra payment).
- The remaining amount is applied to reduce the principal balance.
- This process repeats until the balance reaches zero.
The calculator tracks the total number of months required and the total interest paid throughout the life of the loan. It also compares the results with and without the extra payment to show you the potential time and interest savings.
The Power of Extra Payments
Even small extra payments can make a big difference due to compounding (or rather, the reduction of compounding interest against you). When you make an extra payment:
- That extra money goes entirely towards the principal (after current interest is covered).
- Reducing the principal means less interest accrues in the *next* month and all subsequent months.
- This allows more of your *regular* payment to go towards principal in the future, creating a snowball effect that accelerates your payoff date and significantly reduces the total interest paid.
Use this calculator to experiment with different extra payment amounts. To see how many hours of work that extra payment represents, check out our "Time to Earn" Calculator.
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