Understanding the student loan calculator
Federal and private student loans amortize like any other fixed loan, with a standard term of ten years. The monthly payment covers interest first and chips away at principal, so the earliest payments barely dent the balance. Because student debt often stretches across a decade or more, the total interest can add substantially to what you originally borrowed.
Extra payments are especially effective on student loans because they usually carry no prepayment penalty, and every extra dollar of principal eliminates all its future interest. Even a small monthly add-on can shave years off the term. Borrowers with federal loans should weigh this against income-driven repayment and forgiveness options, which can make aggressive prepayment the wrong move in specific cases.
Results are estimates for education only and are not financial advice.