How to Figure Out the Payoff Date of a Student Loan

Many recent graduates look forward to the day when they will finally be free from the burden of student loan debt. If you have an unusual payoff schedule, the best way to figure out when you will be done is to create your own amortization table by hand or in a spreadsheet program. When you are sticking to a regular schedule, perhaps with consistent extra payments, there are many online calculators available to perform the calculations for you.

Instructions

By Hand

1

Divide the annual interest rate percent by 36525 to calculate the daily interest multiplier. For example, the interest rate 7.9 percent becomes 0.0002163.

2

Multiply the outstanding balance on a loan by the number of days since the most recent payment and the daily interest multiplier to calculate the portion of the payment that will go toward interest. If you owe $9,213 and it has been 30 days since your last payment, multiply $9,213 by 30 by 0.0002163 to get $59.78 of interest.

3

Subtract the interest amount from the amount of your payment that you are making that month. For example, if your payment is $241.92, subtract $59.78 of interest to find that $182.14 is going toward principal reduction.

4

Subtract the amount of your payment that goes toward principal reduction from your previous principal balance. For example, $9,213 minus $182.14 leaves an outstanding balance of $9,030.86. Write the date on which you will make that payment next to it to help in your future calculations of interest.

5

Repeat Steps 2 through 4 for each payment you plan to make. You can fluctuate the payment amount in whatever way you choose, adjusting it for changes in your monthly income or modifications to your repayment schedule. The date on which your outstanding balance reaches $0 is your payoff date.

Online Calculators

6

Enter your loan balance, interest rate and other information into an online loan calculator. Depending on which one you use, you might have to enter the start date and repayment term or the monthly payment you plan to make.

7

Enter any extra payments that you plan to make, either monthly, annually or just once, if the calculator has a space for this. Each of these accelerates your repayment so your payoff date will be sooner.

8

Click on the button to calculate the payoff date for your loan. Most calculators also show the total amount of interest you will pay on your loan.