How it works
Student loans are repaid like any fixed-rate loan: the same payment every month, with interest charged on the balance that's left. Early payments are mostly interest, later ones mostly principal.
Monthly payment = B × r ÷ (1 − (1 + r)^−n), where r = rate ÷ 12 and n = number of months
Any extra you pay goes straight to the balance, so less interest builds up and the loan ends sooner.
Worked example
You owe $35,000 at 6.5%. Over 10 years the payment is $397.42 a month and you pay $12,690 of interest.
Stretch it to 20 years and the payment falls to $260.95, but interest more than doubles to $27,628. Keep the 10-year plan and add $100 a month instead, and you're done 2 years 7 months early, saving $3,504.
Federal repayment plans
- Fixed plans charge the same payment every month, as this calculator shows. Since July 1, 2026 there's also a Tiered Standard plan, whose length of 10 to 25 years depends on how much you owe.
- Income-based plans set the payment by your income instead. The Repayment Assistance Plan (RAP), available from July 1, 2026, charges between 1% and 10% of income.
- Check your options with the Federal Student Aid loan simulator, which uses your actual federal loans.
Private student loans follow whatever terms your lender set. Refinancing can lower the rate, but moving federal loans to a private lender gives up federal plans and protections.
Questions people ask
Should I pay off student loans early or invest?
Compare the loan's rate with what you'd reasonably earn, and take any 401(k) match first. High-rate loans are worth paying down; low-rate ones matter less. The compound interest calculator shows what investing the same money could grow to.
I have several loans. Which should I pay first?
Pay every minimum, then put extra on the highest rate (avalanche) or the smallest balance (snowball). The debt payoff calculator compares both.
Sources
- Federal Student Aid: interest rates and fees for federal student loans
- Federal Student Aid: federal student loan repayment plans
- Federal Student Aid: loan simulator and repayment calculator
- U.S. Department of Education: fact sheet on the Repayment Assistance Plan and Tiered Standard plan
Reviewed September 26, 2026 by The Dollars World team. How we build and check our calculators · Our data and formulas. This is general information, not financial advice.