How this calculator works
Federal servicers use the simple daily interest formula: the interest rate factor (annual rate ÷ 365.25) times the principal balance. Multiply by the number of days to get interest for any period.
Worked example
With the example values below: Interest per day, $5.01 ($150.18 per 30 days). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Principal balance | $28,000 |
| Interest rate | 6.53% |
The simple daily interest formula
Federal student loans use simple daily interest. The servicer multiplies your principal balance by the interest rate factor, the annual rate divided by 365.25, to get each day's interest. Multiply by the number of days between payments for the interest due in that period.
On a $28,000 balance at 6.53%, the daily interest is about $5.01. Over a 30-day month that's about $150, and over a year about $1,828.
Why it matters
- When you pay changes the cost: interest accrues every day, so paying earlier in the cycle means slightly less interest.
- Unpaid interest builds during deferment, forbearance, grace periods and school for unsubsidized loans.
- Interest isn't compounded daily: it's charged on principal, not on unpaid interest, unless interest is capitalized.
Capitalization
Capitalization adds unpaid interest to your principal, after which interest is charged on the larger balance. Federal rules have reduced the situations where it happens, but it can still occur, for example when a deferment on an unsubsidized loan ends. Paying accrued interest before it capitalizes keeps your balance from growing.
The student loan deferment calculator shows how much builds up during a pause and what it does to your payment.
Using daily interest to plan payments
Your monthly payment first covers the interest accrued since the last payment. Anything above that reduces principal, and a lower principal means less daily interest from then on. That's why extra payments early in the loan save the most; see the student loan payoff calculator. Private lenders may use 365 days or different conventions, so check your loan terms.
Frequently asked questions
How is student loan interest calculated daily?
Multiply the principal balance by the annual interest rate divided by 365.25. A $20,000 balance at 6% accrues about $3.29 a day.
Is student loan interest compounded daily?
Federal student loans use simple daily interest: it accrues daily on principal only. It isn't charged on unpaid interest unless that interest is capitalized.
How much interest does my student loan accrue per month?
Daily interest times the days in the month. A $28,000 balance at 6.53% accrues about $5.01 a day, or about $150 in a 30-day month.
Do student loans accrue interest during deferment?
Unsubsidized and PLUS loans do. Subsidized loans don't accrue interest during in-school and most deferment periods. All loans accrue interest during forbearance.
Why does my payment barely reduce my balance?
Each payment covers accrued interest first. On a large balance or high rate, interest takes most of the payment early on. Paying extra toward principal speeds things up.
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Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.