Model the payment, the interest drag, and whether a refinance actually improves the payoff path.
Your monthly payment is a straightforward amortization of the balance over the term. The decision that actually moves money is whether to refinance to a lower rate. Refinancing cuts interest — but if the loan is federal, it permanently surrenders income-driven repayment, forgiveness programs, and hardship protections. This tool shows both numbers side by side: what you pay today and what a lower rate would save, so the borrower-protection trade-off is a deliberate choice, not an accident.
Refinancing $38,000 of federal debt from 6.8% to 5.4% saves roughly $3,200 in interest. That is real money — but it also ends any path to PSLF, IDR forgiveness, and pause-without-penalty. Run the savings here, then weigh it against what you would give up.
The calculator amortizes your balance at your current APR to find the monthly payment, total interest, and payoff date. Then it re-runs the exact same balance and term at your refinance APR and reports the interest difference. Any extra monthly payment is applied to both scenarios so the comparison stays apples-to-apples.
P — current loan balancer — monthly rate (APR ÷ 12)n — total months (term in years × 12)extra — optional additional principal each monthRefi savings — total interest at current APR − total interest at refi APRAdd $100/month extra and the loan clears years early with far less interest — adjust the inputs above to see your own numbers.
| Feature | Federal loan | Private / refinanced |
|---|---|---|
| Interest rate | Fixed, set by Congress | Fixed or variable, credit-based |
| Income-driven repayment | Yes | No |
| PSLF / IDR forgiveness | Yes (if eligible) | No |
| Deferment / forbearance | Broad federal options | Limited, lender's discretion |
| Death / disability discharge | Yes | Varies by lender |
| Rate reduction available? | Only by refinancing out | Yes, that is the point |
| Refinancing federal loans into a private loan is one-way: the federal protections cannot be restored. | ||
Federal loans come from the U.S. Department of Education with fixed rates set by Congress plus protections: income-driven repayment, deferment, forbearance, and forgiveness. Private loans come from banks or credit unions, often with variable, credit-based rates and few of those protections. Refinancing federal loans into a private loan permanently gives up the federal benefits.
Refinancing replaces your loans with a new private loan at a lower rate, cutting total interest. The trade-off: refinancing federal loans forfeits income-driven repayment, PSLF, generous deferment, and discharge protections. It generally makes sense only for stable high earners with private loans, or federal loans they are certain to repay in full without needing those protections.
Income-driven repayment plans cap your federal payment at a percentage of discretionary income and forgive any remaining balance after 20 to 25 years. SAVE was the newest IDR plan but has faced legal challenges and changes — check studentaid.gov for the current status and available options before relying on a specific plan.
PSLF forgives the remaining balance on federal Direct Loans after 120 qualifying monthly payments (about 10 years) made while working full-time for a government or eligible non-profit employer. The forgiven amount is not taxed. Refinancing into a private loan disqualifies you from PSLF permanently.
Capitalized interest is unpaid interest added to your principal, after which you pay interest on the larger amount. It commonly happens at the end of a deferment, grace period, or forbearance, or when leaving certain repayment plans. Paying interest before it capitalizes keeps the balance from growing.
With a Direct Subsidized Loan, the government pays interest while you are in school at least half-time and during grace, so the balance does not grow. With an Unsubsidized Loan, interest accrues from disbursement and capitalizes if unpaid, so the balance grows even before repayment starts.
Compare your loan rate to a realistic after-tax investment return. A high loan rate makes payoff a guaranteed return. A low rate with federal protections can favor splitting between investing, employer retirement matching, and minimum payments. Build an emergency fund first either way.
It uses the standard amortizing loan formula: payment = P × [ r(1+r)n ] / [ (1+r)n − 1 ], where P is the balance, r is the monthly rate (APR ÷ 12), and n is months (years × 12). Any extra monthly payment is added on top and shortens the payoff.
Yes. A refinance is a new loan with its own term. A longer new term can lower the monthly payment but increase total interest; a shorter term does the opposite. Compare lifetime interest, not just the monthly payment, when judging a refinance offer.
No. The calculator runs entirely in your browser and nothing is sent to a server. Share links include the numbers as visible URL parameters, so avoid sharing a link if the figures are private.
Educational only — not financial advice. This tool compares payment math; it does not model IDR formulas, forgiveness eligibility, capitalization events, fees, or credit-based pricing. Confirm current programs at studentaid.gov before giving up federal protections.