Student loans · Interest
Student loan interest accrual calculator.
Enter a balance, a rate and how long you will not pay. See the daily interest, the total that builds up and what the balance becomes if it is added to principal.
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The short answer
Interest on a federal Direct Loan builds up every day: balance times the interest rate factor times the number of days, where the factor is the rate divided by 365.25. A $10,000 loan at 6.8% accrues $1.86 a day, so about $340.70 over 183 days (six months). On an unsubsidized loan that interest is yours even while you are in school or during the grace period.
The formula. Federal Student Aid gives the simple daily interest formula as: interest amount = (outstanding principal balance x interest rate factor) x number of days since last payment, with the rate factor equal to the interest rate divided by 365.25. Months are converted at 365.25 / 12 days each.
Who pays. Federal Student Aid says that on subsidized loans you are not responsible for the interest that accrues while you are in school, while on unsubsidized loans you are responsible for all of it, even in school. Under 34 CFR 685.202(b)(2), unpaid interest on a loan not eligible for interest subsidy during deferment is capitalized when the deferment ends. The last two result lines show the 10-year payment before and after that happens.
Frequently asked questions
How is student loan interest calculated each day?
Multiply the balance by the interest rate divided by 365.25, then by the number of days. At 6.8% on $10,000 that is about $1.86 a day.
Does interest accrue during the grace period?
On an unsubsidized loan, yes: Federal Student Aid says interest keeps accruing in school and during the grace period.
Does interest accrue during deferment?
On a loan that is not eligible for an interest subsidy, yes, and 34 CFR 685.202(b)(2) says the unpaid interest is capitalized when the deferment ends.
Why does this use 365.25 days?
That is the divisor Federal Student Aid says to use to account for leap years. Your servicer’s exact figure can differ by a few cents.
Sources
Checked
- Federal Student Aid: Federal Interest Rates and Fees
- eCFR: 34 CFR 685.202, Charges for which Direct Loan Program borrowers are responsible
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Estimate only
Estimate from the published formula, not your servicer’s statement. Private loans follow their own contract terms.