Student loans can follow you for a decade or more, and small changes to how you repay them can save thousands of dollars in interest. This calculator shows how long your current payment will take to clear the balance and how much sooner — and cheaper — you finish if you pay extra each month.
How student loan interest works
Most student loans use simple daily interest: your rate is divided by 365 and charged on your outstanding principal every day. That means interest never compounds the way it does on a credit card, but it also means every day you carry the balance costs you money. Paying extra reduces principal immediately, so less interest accrues going forward — the effect compounds in your favor over the life of the loan.
A worked example
Imagine a $30,000 balance at 6% APR with a standard $333 monthly payment. On that schedule it takes roughly ten years to repay and costs about $9,970 in interest. Add just $100 extra each month and you finish more than two and a half years early and save over $2,000 in interest. The extra $100 does double duty: it clears principal faster, and because there is less principal left, daily interest shrinks for the entire remaining term.
Federal vs. private loans
Before you aggressively prepay, know what kind of loan you have. Federal loans carry protections — income-driven repayment, deferment, forbearance, and potential forgiveness programs — that you give up nothing by keeping, but that make extra payments less urgent if you are pursuing forgiveness. Private loans have no such protections, so prepaying them is almost always the right move once you have an emergency fund.
Smart payoff strategies
- Ask your servicer to apply extra payments to principal, not to future payments, or the interest savings vanish.
- If you are chasing Public Service Loan Forgiveness, do not prepay — make the minimum and let forgiveness do the work.
- Refinancing can lower your rate, but refinancing federal loans into a private loan permanently forfeits federal protections.
- Set up autopay — many lenders shave 0.25% off your rate for enrolling.
- Target the highest-rate loan first if you hold several, just like the debt avalanche method.