Tool 62

Banking and loans · Study period, interest and repayment

Education Loan Calculator

Created by Arunangshu DasReviewed Nov 14, 2026

Calculate an education loan's monthly repayment and total interest after a study and grace period.

Enter the amount, the annual rate, the months before repayment and the repayment term. Fees, subsidies and income-based schemes are not included.

Amount, rate, months before repayment and term

Enter the amount borrowed as one sum at the start, the annual rate, the months of study and grace before the first repayment, and the number of monthly repayments after that. Then say what happens to the interest charged before repayment starts.

Display market and currency

Formatting only. The calculator performs no currency conversion and applies no country's student loan scheme, subsidy or tax relief.

Amount borrowed (USD)

Annual interest rate, charged monthly (%)

Months before repayment starts (study plus grace), 0 if none

Repayment term in complete months

Interest charged before repayment starts

Your loan agreement says which applies. The result also shows the other two for the same loan.

Monthly repayment, balance at the start of repayment and total interest

Enter the amount, rate, months before repayment and term or load the worked example.

The amount is borrowed in one sum at the start; loans paid out in instalments accrue less interest before repayment. The rate is nominal, charged at one twelfth each month, with interest rounded to 0.01 each month and repayments at the end of each month once repayment starts. Government schemes that charge no interest, subsidise it, index the debt to prices or set repayments by income are not modelled, and neither are fees, insurance, tax relief or early repayment.

Learn how interest builds before repayment

Follow one loan through study, grace and repayment under three treatments of the interest.

Read the education loan guide

Formula and methodology

Monthly interest = balance × r, with r = annual rate ÷ 12 ÷ 100; repayment = P × r ÷ (1 − (1 + r)^−n), with P the balance when repayment starts.

Monthly interest = balance × annual rate ÷ 12, rounded to 0.01. Before repayment starts there are three treatments. Paid as charged: the interest on the amount borrowed is paid each month and the balance does not change. Added when repayment starts: the same monthly interest is held without earning interest itself, then added to the loan in one amount. Added each month: each month's interest joins the balance and is charged interest from then on. Repayment is then a level monthly payment on the balance at that point, the smallest payment in steps of 0.01 whose month-by-month ledger clears the loan within the term.

Definitions

An education loan usually has a period of study, and often a grace period after it, in which no repayment is due. Lenders call this a moratorium, a repayment holiday or deferment. Interest is normally still charged during it. That interest can be paid as it is charged, or left unpaid and added to the loan, which is called capitalisation. Repayment then starts on the larger balance.

Verified worked examples

Borrow 20,000 at 9% a year with 48 months before repayment and 120 monthly repayments. Interest is 150.00 a month. Left unpaid without compounding, 48 months add 7,200.00, so repayment starts on 27,200.00. The repayment is 344.56, the last one 344.21, and interest during repayment is 14,146.85. Total interest is 21,346.85 and the total paid is 41,346.85. Paying the 150.00 each month instead keeps the balance at 20,000.00: the repayment is 253.36 and total interest 17,601.58. Adding the interest each month gives a balance of 28,628.13, a repayment of 362.65 and total interest of 23,517.78.

Interpretation

The balance when repayment starts is the figure that sets the repayment. Every month before repayment adds interest whether or not you pay it; paying it as charged stops it from being added to the loan and from earning interest in repayment. The comparison with repaying at once shows what the waiting months cost in total. A longer repayment term lowers the repayment and raises the interest.

Inputs and interpretation

Enter the amount borrowed as one sum, the annual rate, the months from the day the money is paid out to the month before the first repayment (0 if repayment starts at once), and the number of monthly repayments. Choose what your agreement does with interest before repayment. Choose a market for number formatting only.

Assumptions and limitations

One amount borrowed at the start, a fixed nominal annual rate charged at one twelfth each month, equal model months, interest rounded half up to 0.01 each month, and level repayments at the end of each month once repayment starts. Unpaid interest held without compounding is added to the loan in one amount on the day repayment starts. There are no fees, insurance, subsidies, tax relief, payment holidays during repayment or early repayment.

Supported domain and common mistakes

Amounts above 0 up to 1 trillion with at most 2 decimal places; annual rates from 0% to 100%; 0 to 120 whole months before repayment; 1 to 360 monthly repayments. A balance above 1 trillion when repayment starts is not supported. The calculator does not model a loan paid out in instalments, partial interest payments, a rate that changes, a subsidised or interest-free government loan, a debt indexed to prices, or repayments set by income.

Do not work out the repayment on the amount borrowed when interest has been added to it. Do not assume no interest is charged because no payment is due. Do not treat simple and compound treatment as the same; over 48 months at 9% they differ by 1,428.13 on 20,000. Do not use this for an income-based government scheme, where the repayment does not depend on the balance.

Frequently asked questions

How is an education loan repayment calculated?

First find the balance when repayment starts: the amount borrowed plus any unpaid interest added to it. Then, with monthly rate r and n repayments on balance P, repayment = P × r ÷ (1 − (1 + r)^−n). The calculator rounds to the smallest repayment in 0.01 steps that clears the loan, and the last repayment settles the difference.

Is interest charged during the study period?

On most bank and private education loans, yes. On 20,000 at 9% it is 150.00 a month, or 7,200.00 over 48 months. Some government loans charge none, pay it for you or index the debt instead; those are not modelled here.

What does paying the interest during study save?

It keeps unpaid interest out of the loan. In the example, paying 150.00 a month for 48 months lowers the repayment from 344.56 to 253.36 and the total interest from 21,346.85 to 17,601.58, a saving of 3,745.27.

What is the difference between simple and compound interest before repayment?

With simple treatment the unpaid interest earns no interest until it is added to the loan when repayment starts. With compounding it is added every month. On 20,000 at 9% over 48 months the balance becomes 27,200.00 with simple treatment and 28,628.13 with monthly compounding.

What counts as the months before repayment?

Every month from the day the money is paid out until the month before your first repayment: the rest of the course plus any grace period. Enter 0 if repayment starts one month after the loan is drawn.

Does a longer repayment term cost more?

Yes. With the same 27,200.00 balance, 180 repayments instead of 120 lower the repayment from 344.56 to 275.89 and raise the total interest from 21,346.85 to 29,656.60.

Sources and educational scope

Educational arithmetic for a fixed-rate education loan with months before repayment and level repayments after. It is not a loan offer, an eligibility assessment, a statement of any lender's or government scheme's terms, tax guidance or financial advice. A lender's own rounding, day count, disbursement schedule, fees and conventions will differ; rely on the lender's documents.

Reviewed 2026-11-14. AI-assisted content under operator editorial responsibility. No independent expert financial review is claimed.