See how much sooner you'll be debt-free and how much interest you'll save by adding a little extra to each payment.
This is an estimate that assumes a fixed rate and a constant payment. Federal student loan terms, rates, and repayment plans differ from private loans. This tool is for educational purposes only and is not financial advice; consider speaking with your loan servicer about your options.
Student loans typically accrue interest daily on the balance, billed monthly. Every dollar above the required payment goes straight to principal, which shrinks the balance and reduces the interest charged for the rest of the loan. Because that effect compounds, even a small extra amount can knock years and thousands of dollars off the total.
The calculator runs your loan twice — at your current payment and with the extra added — and shows the difference in payoff time and total interest, plus a year-by-year schedule.
By default, some servicers apply an overpayment to "pay ahead" on future bills rather than reducing your principal now. That doesn't save you interest. Tell your servicer in writing to apply any extra directly to principal, and check your next statement to confirm it was.
If you have several loans, applying extra to the highest-rate one first — the avalanche method — saves the most interest. Targeting the smallest balance first (the snowball) gives quicker wins for motivation.
Federal student loans come with protections private loans usually don't: income-driven repayment plans, deferment and forbearance, and potential loan forgiveness programs. Private loans generally have fixed terms set by the lender.
This matters most around refinancing. Refinancing replaces your loans with a new private loan, which can lower your rate — but refinancing a federal loan permanently forfeits those federal benefits. Pay extra on federal loans rather than refinancing if you might need income-driven repayment or forgiveness.
Whether to throw spare cash at loans or invest it comes down to comparing your loan's rate to your expected after-tax investment return. Paying down a 7% loan is a guaranteed 7% "return"; investing might beat that but carries risk. Clearing high-rate debt first is rarely a bad move.
Many people split the difference: capture any employer 401(k) match first, keep a small emergency fund, then direct extra money to high-rate loans.
If your monthly payment is smaller than the interest accruing that month — which can happen on some income-driven plans — the unpaid interest is added to your balance and it grows instead of shrinks. The calculator flags this so you can see when a payment is too low to make headway.
Paying at least the monthly interest keeps the balance from rising; paying more than that is what actually retires the debt.
Yes. Extra payments reduce principal, so less interest accrues for the rest of the loan. You finish sooner and pay less interest overall, as long as the extra is applied to principal.
No. Federal and essentially all private student loans have no prepayment penalty, so you can pay extra or pay them off early without a fee.
Be cautious. Refinancing federal loans into a private loan permanently gives up income-driven repayment, deferment, and forgiveness options. It can make sense for private loans or for borrowers certain they won't need those protections.
Compare your loan rate to your expected after-tax return. Paying off the loan is a guaranteed return equal to the rate; investing carries more risk. Capturing an employer 401(k) match usually comes first.
It's when your payment is less than the interest charged, so unpaid interest is added to the balance and the loan grows. Paying at least the monthly interest prevents it.