This calculator provides an estimate. Actual payments may vary based on your lender's specific terms.
Understanding Your Student Loan Payments
Navigating student loan repayment can feel complex. This calculator helps you estimate your monthly payments, the total interest you'll pay, and the total amount you'll repay over the life of your loan. Understanding these figures is crucial for budgeting and making informed financial decisions.
How the Calculation Works
The monthly payment for a student loan is typically calculated using the standard annuity formula. This formula takes into account the principal loan amount, the interest rate, and the loan term to determine a fixed monthly payment that will pay off the loan over time.
The formula for the monthly payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly loan payment
P = The principal loan amount (the total amount you borrowed)
i = Your monthly interest rate (your annual interest rate divided by 12)
n = The total number of payments over the loan's lifetime (your loan term in years multiplied by 12)
Breaking Down the Terms:
Loan Principal Amount (P): This is the original amount of money you borrowed, not including any interest that may have accrued before repayment began.
Annual Interest Rate: This is the yearly percentage charged by the lender. It's crucial to convert this to a monthly rate by dividing by 12 for the calculation. For example, a 5% annual rate becomes approximately 0.004167 (5 / 12 / 100).
Loan Term (Years): This is the total duration of your loan, usually expressed in years. For the formula, this needs to be converted into the total number of monthly payments by multiplying by 12. A 10-year loan term means 120 payments (n = 120).
Calculating Total Interest and Total Repaid:
Once the monthly payment (M) is determined, calculating the total interest and total repaid is straightforward:
Total Amount Repaid = Monthly Payment (M) × Total Number of Payments (n)
Total Interest Paid = Total Amount Repaid – Loan Principal Amount (P)
Why Use This Calculator?
Budgeting: Estimate how much room your student loan payments will take up in your monthly budget.
Comparison: Compare different loan offers by inputting their principal, interest rates, and terms.
Planning: Understand the long-term cost of your student debt, including the total interest.
Loan Payoff Strategies: See how changes in loan term or interest rate might affect your payments, helping you strategize on how to pay off your loans faster.
Remember, this calculator provides an estimate. Your loan servicer will provide the exact figures. It's always a good idea to review your loan documents carefully.
function calculateLoan() {
var principal = parseFloat(document.getElementById("loanAmount").value);
var annualRate = parseFloat(document.getElementById("annualInterestRate").value);
var years = parseInt(document.getElementById("loanTermYears").value);
var monthlyPayment = 0;
var totalInterest = 0;
var totalRepaid = 0;
// Input validation
if (isNaN(principal) || principal <= 0) {
alert("Please enter a valid loan principal amount.");
return;
}
if (isNaN(annualRate) || annualRate < 0) {
alert("Please enter a valid annual interest rate.");
return;
}
if (isNaN(years) || years <= 0) {
alert("Please enter a valid loan term in years.");
return;
}
// Calculations
var monthlyRate = annualRate / 100 / 12;
var numberOfPayments = years * 12;
if (monthlyRate === 0) {
// Handle case with 0 interest rate
monthlyPayment = principal / numberOfPayments;
} else {
monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
totalRepaid = monthlyPayment * numberOfPayments;
totalInterest = totalRepaid – principal;
// Display results, formatted to two decimal places
document.getElementById("monthlyPayment").innerText = "$" + monthlyPayment.toFixed(2);
document.getElementById("totalInterest").innerText = "$" + totalInterest.toFixed(2);
document.getElementById("totalRepaid").innerText = "$" + totalRepaid.toFixed(2);
}