Student Loan Refinance Calculator
A Lower Rate Doesn't Always Mean Lower Total Cost
Refinancing a student loan swaps one rate and term for another, and the monthly payment almost always changes — but the total interest paid over the life of the loan can move in a direction that surprises borrowers who only compare monthly numbers. Stretching a refinance out to a longer term routinely lowers the payment while raising the total interest bill. This calculator runs both loans through the same amortization formula so the comparison is apples-to-apples on payment, total interest, and the actual dollar savings or cost.
The Formula
The calculator applies this monthly-payment formula twice — once for the current loan's rate and remaining term, once for the proposed refinance rate and term — then compares total interest paid (monthly payment × number of payments, minus principal) across both.
Same Balance, Two Outcomes
| Current loan (7%, 10yr) | Refinanced loan (5%, 10yr) | |
|---|---|---|
| Monthly payment | $464.43 | $424.26 |
| Total interest | $15,732.07 | $10,911.45 |
Keeping the term the same and only lowering the rate here saves $40.17/month and $4,820.62 in total interest — a case where the monthly and lifetime savings both point the same direction.
Where Term Length Changes the Answer
| Term | Monthly payment | Total interest |
|---|---|---|
| 10 years | $444.08 | $13,289.84 |
| 15 years | $337.54 | $20,757.69 |
Extending the term by five years at the identical rate drops the payment by over $100/month but adds roughly $7,468 in total interest — a lower monthly bill funded by a higher lifetime cost.
Where This Calculation Matters
- Rate-shopping across lenders — comparing multiple refinance offers on total interest, not just the advertised rate, surfaces which offer is actually cheaper.
- Weighing federal loan tradeoffs — refinancing federal loans into a private loan gives up income-driven repayment and forgiveness eligibility, so the interest savings needs to be worth that loss.
- Choosing a shorter vs. longer term — borrowers who can afford a higher payment can see exactly how much a shorter term saves in interest.
How to Use This Calculator
- Enter your current loan balance.
- Enter your current interest rate and the remaining term in years.
- Enter the new interest rate you're being offered.
- Enter the new loan term in years.
- Select Calculate to see the monthly payment change and total interest saved (or added).
Related Calculations
Weigh a refinance against staying federal with the Federal vs Private Loan Calculator, or check the Loan Consolidation Calculator if you're combining several federal loans instead.