Student Loan Calculator — Calculations & Slabs for FY 2026-27

Capitalized interest is unpaid interest that is added to the principal balance of your loan. This typically occurs at the end of a deferment, forbearance, or grace period. Once interest capitalizes, you start paying interest on that new, larger principal amount, which increases your overall cost of borrowing.

For Direct Subsidized Loans, the US Department of Education pays the interest while you are in school at least half-time, during the six-month grace period, and during periods of deferment. For Direct Unsubsidized Loans, you are responsible for paying the interest during all periods. If you do not pay the interest during school or deferment, it capitalizes when repayment begins.

The Standard Repayment Plan is the default repayment plan for federal student loans. It features fixed monthly payments of at least $50 over a term of 10 years (120 months). It is generally the fastest and most cost-effective way to pay off federal student loans compared to income-driven plans.

IDR plans set your monthly student loan payment at a percentage of your discretionary income (usually 5% to 15%), and adjust annually based on your income and family size. Any remaining balance is forgiven after 20 or 25 years of qualifying payments. While IDR plans lower your monthly payments, they can increase the total interest you pay over the life of the loan.

Yes, you can refinance both federal and private student loans into a new private student loan, often to get a lower interest rate. However, refinancing federal loans means you will permanently lose federal benefits and protections, including income-driven repayment plans, public service loan forgiveness (PSLF), and loan deferment options.