Use this calculator to estimate your monthly student loan payments and the total interest you'll pay over the life of the loan. Enter your loan details below.
Calculating student loan payments is an essential skill for anyone taking on educational debt. This guide will walk you through the process of determining your monthly payments and the total interest you'll pay over the life of your loan.
The formula used to calculate monthly student loan payments is:
$$P = L\frac{r(1+r)^n}{(1+r)^n-1}$$
Where:
Let's calculate the monthly payment and total interest for a student loan with the following terms:
Step 1: Calculate the monthly interest rate
$$r = \frac{5\%}{12} = 0.4167\% = 0.004167$$
Step 2: Calculate the total number of monthly payments
$$n = 10 \text{ years} \times 12 \text{ months/year} = 120 \text{ payments}$$
Step 3: Apply the monthly payment formula
$$P = 30,000 \times \frac{0.004167(1+0.004167)^{120}}{(1+0.004167)^{120}-1} = 318.20$$
Step 4: Calculate total interest paid
Total amount paid = $318.20 × 120 = $38,184
Total interest = $38,184 - $30,000 = $8,184
Result: The monthly payment would be $318.20, and the total interest paid over the life of the loan would be $8,184.
This diagram illustrates how a $30,000 student loan is repaid over 10 years with a 5% annual interest rate. The graph shows the decreasing loan balance, the cumulative interest paid, and the cumulative principal paid over time. Notice how the loan balance decreases more rapidly towards the end of the loan term as more of each payment goes towards the principal rather than interest.