When will you be debt-free?
See your payoff date, total interest, and how even small extra payments shorten the loan.
Calculator educationLogic updated April 2026
This calculator projects the payoff timeline of a student loan at a fixed monthly payment, with an optional extra payment to compare against. It returns the month-by-month schedule, total interest paid, and — when an extra payment is supplied — the interest and time saved by paying more than the minimum each month.
How this is calculated
Formula
Each month: interest = balance × rate / 12 ; principalPaid = max(0, payment − interest) ; balance = balance − principalPaidStep-by-step
- Calculate the monthly interest rate as the annual rate divided by 12
- For each month, accrue interest on the current balance
- Subtract the monthly payment (minimum + extra) from the balance plus interest — the principal portion is the payment minus the interest charge
- Continue until the balance reaches zero or the simulation cap of 600 months is hit
- If the payment doesn't exceed monthly interest, the loan never amortises — the calculator flags it and recommends a minimum viable payment
- When an extra payment is supplied, run a parallel minimum-only simulation to compute interest saved and months saved
- Rounding mode
- ROUND_HALF_UP
- Precision
- 20-digit internal precision (Decimal.js), rounded to 2 decimal places for display
- Logic last reviewed
Assumptions & limitations
What this calculator assumes
- Fixed interest rate for the life of the loan
- Repayments are made at the end of each month
- No origination fees, no prepayment penalties
- Internationally neutral — no jurisdictional repayment thresholds, no income-contingent rules
- Iteration is capped at 600 months (50 years)
What this calculator doesn’t account for
- Doesn't model income-contingent repayment plans that some jurisdictions offer
- Doesn't include any government interest subsidies, indexation rules, or write-off provisions
- Doesn't factor in tax effects (some jurisdictions allow interest deductions on student loans)
- Doesn't model variable rates or rate changes mid-loan
- Doesn't include forgiveness schemes that may be available for certain employment types
Worked example
A graduate has a $40,000 student loan at 6% APR with $400/month minimum. They consider adding $150/month.
| Input | Value |
|---|---|
| Loan balance | $40,000 |
| Annual rate | 6% |
| Monthly payment | $400 |
| Extra payment | $150/month |
Minimum only: ~165 months / ~$26,000 interest. With $150 extra: ~109 months / ~$15,200 interest. Saved: 56 months, ~$10,800 interest.
Each month at $400 minimum, about $200 goes to interest (month 1) and $200 to principal — the loan amortises slowly because interest accrues on a high balance. Adding $150 brings the payment to $550, which raises the principal share to $350. The balance falls roughly 75% faster, and total interest drops by about 40%. The $150/month extra ($16,350 over 109 months) returns $10,800 in interest savings — a meaningful return on consistent extra repayment.
Frequently asked questions
How is student loan interest calculated?
Most student loans use simple monthly amortisation: interest = balance × annual rate ÷ 12, applied each month. Each repayment first covers the interest charged that month, then reduces the principal. As the principal shrinks, future interest charges shrink too — that's why later payments make more progress than earlier ones, even though the dollar amount is the same.
Should I pay more than the minimum?
Usually yes if the loan rate is above what you'd earn on a safe alternative. At 5–7% loan rates, paying extra is typically a better return than savings accounts (which currently pay less). But weigh this against any matched retirement contributions you're missing, high-interest debt elsewhere, or a missing emergency fund. Use the calculator to size what 'paying more' actually buys you in time and interest saved.
How does loan term affect total cost?
Longer terms mean smaller monthly payments but much more total interest, because you carry the balance for longer and interest compounds on it the whole way. A 10-year payoff vs a 25-year payoff at the same rate typically costs 50–60% less interest. The trade-off is monthly cash flow — longer terms are easier to fit into a tight budget.
When is it better to invest than pay off the loan?
When your expected after-tax investment return is meaningfully higher than your loan's after-tax interest rate. If your loan is at 4% (after any tax deduction) and you can earn 7% in a diversified investment, the math favours investing. If your loan is at 8% with no deduction, paying it off is hard to beat. Most planners suggest paying minimum on the loan, building an emergency fund, capturing any matched retirement contributions, then deciding.
What happens if my payment doesn't cover the interest?
The balance grows month-on-month — interest is being charged on a balance that isn't reducing, so the loan never closes. The calculator detects this and refuses to run a meaningless simulation. The fix is to increase the payment so it exceeds the first month's interest, refinance to a lower rate, or — in some jurisdictions — apply for hardship relief on the loan terms.
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