Student Loan Payoff Calculator

Quick takeaway: This student loan payoff calculator estimates how many months it will take to pay your balance to $0, your approximate debt-free date, and the total interest you’ll pay—based on your APR, monthly payment, optional extra payments, a one-time lump sum, and a grace period. Use it to compare “pay the minimum” vs. “pay a little extra” and understand how interest accrues over time.

What this calculator does

Student loans are typically repaid with amortization: interest accrues on the outstanding principal balance, then each payment is applied to interest first and the remainder reduces principal. When you add an extra monthly amount (or make a one-time lump sum payment), more principal is reduced earlier, which usually:

• shortens the payoff time,
• reduces total interest paid, and
• moves your estimated payoff date earlier.

This tool models the payoff month-by-month using your inputs:

• Loan Balance: current principal balance.
• Annual Interest Rate (APR %): your stated yearly rate.
• Monthly Payment: what you plan to pay each month (before optional extras).
• Extra Monthly Payment (optional): added to the monthly payment each month.
• One-Time Payment + Lump Sum Date (optional): a one-off principal reduction applied in the chosen month.
• Start Date: when repayment (or the grace period) begins.
• Grace Period (months): months where payments are deferred; interest may still accrue (see assumptions).

Formulas used (amortization math)

The calculator uses a monthly interest rate derived from the APR:

Where r is the annual interest rate expressed as a decimal (e.g., 5% → 0.05) and i is the monthly rate.

Each month, interest accrues on the current balance:

Interest = Balance × i

Your total scheduled payment for the month is:

Total Payment = Monthly Payment + Extra Monthly Payment (if any)

Then the payment is applied:

• Interest Paid = min(Total Payment, Interest)
• Principal Paid = max(0, Total Payment − Interest)
• New Balance = Balance + Interest − Total Payment (bounded at 0)

If you add a lump sum in a given month, it reduces the balance after interest accrues for that month (details may vary by servicer; see assumptions):

Balance after Lump Sum = max(0, New Balance − Lump Sum)

Grace period behavior

During a grace period, borrowers often don’t make required payments, but interest may still accrue depending on loan type and subsidy. This calculator treats the grace period as months with no payments while interest accrues monthly, increasing the modeled balance before repayment begins. Some servicers may capitalize accrued interest (add it to principal) at the end of grace; others show it separately until capitalization triggers. See the assumptions section for how to interpret this.

How to interpret the results

The results panel typically summarizes three core outputs:

• Estimated payoff date: the month/year your balance reaches $0 in the model.
• Payoff time: total number of months (or years + months) to repay.
• Total interest paid: the sum of all monthly interest amounts that were accrued and paid over the payoff period.

Why early months look “interest-heavy”: interest is calculated on your outstanding balance, so the earlier months (when the balance is largest) typically accrue the most interest. As principal falls, monthly interest shrinks, and a larger share of each payment goes to principal.

Negative amortization (payment too low)

If your monthly payment is less than the monthly interest, the balance can grow over time—this is called negative amortization. In that situation, the calculator may indicate that the loan will not be paid off under the current payment amount (or it may show a rapidly extending timeline). If you see this, consider increasing the payment, reducing the interest rate, or reviewing your servicer’s repayment plan rules.

Worked example

Scenario:

• Loan Balance: $30,000
• APR: 5.00%
• Monthly Payment: $350
• Extra Monthly Payment: $50
• Lump Sum: $2,000 applied in month 12
• Grace Period: 0 months

Step 1 — monthly rate: i = 0.05 / 12 ≈ 0.0041667

Step 2 — month 1 interest: $30,000 × 0.0041667 ≈ $125.00

Step 3 — payment application (month 1):

• Total Payment = 350 + 50 = $400
• Interest Paid ≈ $125
• Principal Paid ≈ $400 − $125 = $275
• New Balance ≈ $30,000 − $275 = $29,725

Over time, the interest portion decreases. When the $2,000 lump sum hits (month 12), it knocks down principal substantially, which reduces future interest charges and speeds up payoff. Your exact results will depend on rounding, the exact month the lump sum is applied, and your loan’s interest rules, but typically:

• adding $50/month can save months (or years) vs. paying $350 alone, and
• a lump sum early tends to save more interest than the same lump sum made later.

Comparison: common payoff strategies

Limitations and assumptions (important)

• Fixed rate assumption: The calculator assumes a constant APR for the full payoff period. Variable-rate loans may differ materially.
• Monthly compounding model: Interest is modeled on a monthly basis using APR/12. Many student loans accrue interest daily using a daily rate and the actual number of days in a month, which can cause small differences.
• Payment timing: Payments are assumed to occur once per month (end-of-period for the month being modeled). Servicers may apply payments on specific due dates; timing can slightly change interest.
• Grace period treatment: Grace months are modeled as no payments while interest accrues. Whether that interest capitalizes immediately, at repayment start, or at other events depends on loan type and servicer rules.
• Lump sum timing: The lump sum is applied in the selected month. If the date falls before/after the normal due date, your servicer may calculate interest differently for that cycle.
• Fees and penalties not included: Late fees, origination fees already embedded in the balance, collection costs, and other charges are not modeled.
• Plan rules not modeled: Income-driven repayment (IDR), forgiveness (PSLF or other programs), deferment/forbearance rules, and interest subsidies are not included unless you manually reflect them via payment and rate assumptions.
• Rounding: Servicers round interest and principal allocations to cents and may apply rules that differ from this simplified model; totals can differ by a small amount.
• Estimates only: This tool is for planning and comparison. For official payoff quotes, consult your loan servicer.

FAQs

Does paying extra always reduce total interest?

Generally yes, because reducing principal sooner lowers the balance that future interest is calculated on. The main exception is if your servicer applies extra amounts to future scheduled payments rather than principal; you may need to specify “apply extra to principal” when making payments.

What if my monthly payment is too low?

If your payment is less than the interest that accrues each month, your balance can grow (negative amortization). Increase the payment, reduce the rate, or review your repayment plan options.

How does the grace period affect payoff?

If interest accrues during grace, your balance effectively grows before repayment starts, increasing total interest and extending payoff time unless payments are increased.

How is the lump sum handled?

The lump sum reduces the balance in the month you select. Applying it earlier usually saves more interest than applying the same amount later.

Will my real payoff date match the calculator exactly?

Not always. Daily interest accrual, payment posting dates, capitalization rules, and rounding can shift the payoff date and interest totals. Use the calculator for directionally accurate planning, and confirm details with your servicer.

Last updated: 2026-01-10