Cost Calculator AI
Education & SchoolInterest Accrual

Student Loan Interest Calculator

Calculate daily and monthly student loan interest accrual, in-school compounding, and the hidden cost of interest capitalization upon graduation.

Calculation Results

Daily Interest Accrual Formula

Daily Interest = Principal Balance × (Interest Rate / 365.25)
  • Student loans utilize simple daily interest accrual between monthly payments.
  • Unpaid interest capitalizes into principal at status changes (graduation, deferment exit, forbearance).
  • Once capitalized, you pay interest on interest for the remainder of your repayment term.
  • Reveals the exact daily dollar cost of carrying student loan debt.

Step-by-Step Worked Example

Scenario: Senior with $30,000 in unsubsidized federal loans at 6.8% APR approaching a 6-month grace period.

Calculation Steps:

  1. Calculate Daily Interest: $30,000 × (0.068 / 365.25) = $5.59 per day.
  2. Calculate Monthly Interest: $30,000 × (0.068 / 12) = $170.00 per month.
  3. Total Interest over 54 Months (College + Grace): $170 × 54 = $9,180.
  4. Capitalized Balance upon Repayment: $30,000 + $9,180 = $39,180.
Result: Your loan accrues $5.59/day ($170/month) in interest. Over 4 years plus the grace period, $9,180 capitalizes into a new starting balance of $39,180.

How to Use This Calculator

  1. 1Enter current outstanding loan principal.
  2. 2Input the annual percentage rate (APR).
  3. 3Specify college years and grace period months to calculate accumulated interest.

Assumptions & Limitations

  • Uses standard 365.25 day leap-year adjusted banking calendar.
  • Assumes no interest payments were made during college enrollment.

Frequently Asked Questions

What is a student loan grace period?

A grace period is a 6-month window after graduating or dropping below half-time enrollment before your first mandatory loan payment is due. Unsubsidized loans continue accruing interest during this period.

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