Student Loan Payoff Calculator

Federal student loans are issued by the government and offer fixed interest rates, income-driven repayment options, and potential forgiveness programs. Private student loans are issued by banks and have variable or fixed rates determined by your credit score. Federal loans typically have lower interest rates and more borrower protections. Private loans may offer better rates for borrowers with excellent credit.

To pay off faster: (1) Pay more than the minimum monthly payment, (2) Make extra payments when you receive bonuses or tax refunds, (3) Refinance to a lower interest rate if eligible, (4) Consider a side income to dedicate toward loan payments, (5) Avoid deferment or forbearance unless necessary. Even small increases in monthly payments can significantly reduce your payoff time.

Income-driven repayment plans adjust your federal student loan payment based on your income and family size. Options include Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE). These plans can lower your monthly payment if you have a low income, but may extend your payoff time and increase total interest paid. After 20-25 years of payments, remaining balance may be forgiven.

Refinancing makes sense if you have good credit, stable income, and can get a significantly lower interest rate. However, refinancing federal loans means losing federal protections like income-driven repayment and forgiveness programs. Calculate the interest savings versus the loss of protections. Private loan refinancing is generally safer since you're not giving up federal benefits.

Student loan forgiveness programs cancel remaining loan balance after a certain period of payments or service. Public Service Loan Forgiveness (PSLF) forgives loans after 10 years of payments while working in public service. Income-driven repayment plans offer forgiveness after 20-25 years. Teacher loan forgiveness and other programs exist for specific professions. Check if you qualify for any forgiveness programs.

Interest accrues daily on your loan balance at your interest rate. Unsubsidized loans accrue interest even while you're in school. Subsidized federal loans don't accrue interest while you're in school. Interest is added to your balance monthly, and you pay interest on the interest (compound interest). This is why paying extra early in your loan term saves the most money.

Yes! You can deduct up to $2,500 in student loan interest paid during the tax year. This deduction is available to single filers with income below $85,000 and married filers below $170,000. The deduction phases out at higher incomes. This tax benefit effectively reduces your cost of borrowing and can provide significant savings.

Missing a payment can have serious consequences: (1) Your credit score drops, (2) Late fees may be charged, (3) Your loan enters delinquency after 90 days, (4) Your loan enters default after 270 days, (5) Your wages may be garnished, (6) Your tax refunds may be seized. If you're struggling, contact your loan servicer about deferment, forbearance, or income-driven repayment options.

Ideally, you should do both. If your employer offers a 401(k) match, contribute enough to get the full match—it's free money. Then focus on paying down high-interest debt. For low-interest federal student loans, you might prioritize retirement savings since the long-term investment returns may exceed the loan interest rate. Balance both goals based on your interest rates and financial situation.

Student loans affect your credit score through payment history (35%), credit utilization (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). Making on-time payments builds your credit. A higher credit score helps you qualify for better rates on mortgages, car loans, and credit cards. Conversely, missed payments or default significantly damage your credit.