Student Loan Calculator

Where the three numbers on this page come from

The figures in the examples above are not measurements of anything in the world. They are arithmetic, worked on numbers we chose, using the standard amortisation formula. We label them as illustrations because a number that looks like data and is not is the single most common failure on cost pages, including on pages of ours that we have had to correct.

The formula is the one every fixed rate instalment loan uses. The monthly payment is the principal multiplied by the monthly rate, divided by one minus one plus the monthly rate raised to the negative number of payments. The monthly rate is the annual rate divided by twelve. Total interest is the payment multiplied by the number of payments, minus the principal. Nothing in that is proprietary and nothing in it is an estimate: given three inputs, there is exactly one answer.

Applied to the example: a principal of 25,000 at 6.5 per cent over ten years gives 120 payments of about 283.87 and a total repayment of about 34,064, which is about 9,064 of interest. That is where “about 9,000” comes from. Change any input and the answer changes; that is the whole point of the calculator above.

What no authority publishes, and why this page has no rate table

We publish no “typical” interest rate, no “average” student debt and no country by country loan table, because student lending is not one thing. It spans government backed schemes with statutory terms, commercial lending priced on risk, and family arrangements with no terms at all. No single publisher stands behind a figure that spans those.

What is published, by governments, is something different and more useful: the amount you must evidence to obtain a visa. That is a threshold, not a debt, and it caps how much borrowing your plan can plausibly need. Those thresholds are collected with their publishers and reference periods on our what each government requires you to show page and in the costs by country table.

The four questions that decide what a loan actually costs

The rate is the number people compare. It is rarely the number that decides the outcome.

• Is the rate fixed or variable, and for how long? A variable rate quoted today is a forecast, not a price. A fixed rate that resets after an introductory period is a variable rate with better marketing.
• When does interest start accruing? Some schemes capitalise interest during study, so the balance you begin repaying is larger than the sum you borrowed. Others do not. This difference is frequently larger than a difference of one or two percentage points in the headline rate.
• What is the repayment trigger? A loan that repays on a fixed schedule from a fixed date behaves nothing like one that repays a percentage of income above a threshold. The second can cost more in total and still be safer, because it cannot demand money you do not have.
• What currency is it in, and what currency will you earn in? Borrowing in one currency and earning in another adds a risk the calculator above cannot model, because it is not arithmetic; it is exposure. Our currency converter for students shows the reference rate you should be comparing any offer against.

Why extra payments do so much, and why the effect is not free

An extra payment reduces the balance immediately, and every future interest charge is calculated on that smaller balance. The saving therefore compounds, which is why a small extra amount early beats a large one late. The calculator above shows this on your own numbers.

Two conditions have to hold for it to be worth doing. There must be no prepayment penalty, which is a term you have to read rather than assume. And the money must not be needed as a buffer: paying down a loan converts liquid savings into an illiquid reduction in debt, and a student in a foreign country without a buffer is a student one unexpected bill away from a much more expensive kind of borrowing.

Borrow last, not first

The order matters more than the terms. Reduce the amount before you improve the rate.

1. Fix the destination question first. Some states set tuition in a rule and some leave it entirely to institutions; the difference is larger than any interest rate. See what governments publish by country and where tuition is low or absent.
2. Apply for funding in volume and on time. Read how scholarships get won and what fully funded actually covers, because an award that covers tuition but not living costs changes your borrowing by less than you expect.
3. Cost the whole year from documents. Our college cost calculator builds the total; studying abroad on a budget covers the mechanisms that reduce it.
4. Establish the funds threshold you must evidence anyway. See proof of funds explained. Borrowing to satisfy a funds test is treated differently by different authorities and is not something to improvise.
5. Only then size the loan, and run it through the calculator above at the term you would actually accept, not the term with the smallest monthly payment.

Before you sign anything

• Rate confirmed as fixed or variable, and for what period
• Interest capitalisation during study confirmed in writing
• Repayment trigger identified: fixed schedule or income contingent
• Prepayment penalty checked, in the terms rather than the marketing
• Currency of the loan compared with the currency you expect to earn in
• Total repayment calculated, not just the monthly payment
• Scholarship applications completed before the loan amount was fixed
• Funds threshold for the destination read at the authority
• Emergency buffer preserved rather than used to reduce the principal
• The plan tested at zero earnings from part time work

Print this checklist

This page explains arithmetic and process. It is not financial advice and it is not immigration advice. We are not a lender, we are not paid by one, and we link none. See our editorial policy and disclosure.