See your monthly payment, total interest, and how extra payments can save you thousands.
Federal student loans typically use a standard 10-year repayment plan with fixed monthly payments. Like any amortized loan, early payments go mostly toward interest while later payments go mostly toward principal. The standard amortization formula determines your monthly payment based on balance, rate, and term.
Direct Subsidized and Unsubsidized Loans for undergraduates carry a rate of approximately 6.53%. Graduate Direct Unsubsidized Loans are approximately 8.08%. Parent PLUS and Grad PLUS Loans are approximately 9.08%. Private loan rates vary widely from 4-15% based on creditworthiness and lender.
Standard Repayment (10 years, fixed payments) costs the least in total interest. Extended Repayment (up to 25 years) lowers monthly payments but dramatically increases total interest. Income-Driven Repayment (IDR) plans cap payments at 10-20% of discretionary income with forgiveness after 20-25 years. Public Service Loan Forgiveness (PSLF) forgives remaining balance after 120 qualifying payments while working for a qualifying employer.
Every extra dollar you pay goes directly to principal, reducing the base on which future interest is calculated. On a $35,000 loan at 5.5%, adding $100/month saves approximately $2,500 in interest and pays off the loan nearly 2 years early. Adding $200/month saves about $4,200 and cuts the timeline by almost 4 years.