Deferment Interest Calculator
Subsidized and Unsubsidized Loans Behave Differently Here
A deferment or forbearance pauses required payments, but it doesn't necessarily pause interest — and whether it does depends entirely on loan type. Subsidized federal loans have their interest covered by the government during an approved deferment, so the balance doesn't move. Unsubsidized loans keep accruing interest the entire time, and if that interest isn't paid before the deferment ends, it typically capitalizes — gets added to the principal — permanently raising the base the loan's interest is calculated against going forward.
The Formula
For subsidized loans in deferment, this calculation is skipped entirely — the government pays the interest, so the balance stays unchanged. For unsubsidized loans, this simple-interest formula runs for the full deferment period, and the result is added to principal to project the post-capitalization balance.
Interest Accrued on an Unsubsidized Loan
| Deferment period | Interest accrued | Balance after capitalization |
|---|---|---|
| 3 months | $375.00 | $25,375.00 |
| 6 months | $750.00 | $25,750.00 |
| 12 months | $1,500.00 | $26,500.00 |
| 24 months | $3,000.00 | $28,000.00 |
A subsidized loan of the same balance and rate would show $0.00 accrued interest across every one of these periods — the government absorbs the interest cost rather than the borrower.
Where This Calculation Matters
- Economic hardship or unemployment deferment — knowing exactly how much an unsubsidized balance will grow helps decide whether to make interest-only payments during the pause rather than letting it capitalize.
- In-school deferment — students with unsubsidized loans in deferment while enrolled can project the balance they'll actually start repayment with.
- Military and medical deferments — longer deferment periods make the capitalized-interest impact larger, worth quantifying before the deferment starts.
How to Use This Calculator
- Enter the loan's principal balance.
- Enter the annual interest rate.
- Enter the deferment or forbearance period in months.
- Select the loan type — subsidized or unsubsidized.
- Select Calculate to see interest accrued and the balance after capitalization.
Related Calculations
Once you know the post-deferment balance, run it through the Student Loan Payoff Calculator to see the updated payoff timeline, or the Student Loan Interest Calculator to check accrual over a specific number of days rather than months.