Deferred Payment Loan Calculator helps borrowers understand how deferment affects capitalized interest, eventual monthly payments, and total repayment costs across the loan term.
Calculate Your Future Payment on a Deferred Federal Student Loan
This calculator shows your monthly payment after a deferment period ends. If your loan is unsubsidized, it adds any interest that built up during deferment onto your balance. If it’s subsidized, your balance stays the same. Then it spreads the resulting balance over your repayment term. It’s built for federal student loan borrowers, and for anyone with a similarly structured deferred loan, who wants to see how postponing payments changes the monthly bill and the total interest paid.
Entering Your Loan, Deferment Length, and Deferment Type
Enter the original loan amount, its APR, whether the loan is subsidized or unsubsidized, the deferment length in months, and the repayment term in months. The output shows the post-deferment monthly payment, the capitalized starting balance, and total interest. Interest accrues on a simple, non-compounding basis during deferment, then compounds monthly once repayment begins.
How Capitalized Interest and the Post-Deferment Payment Are Calculated
During deferment, an unsubsidized loan accrues simple interest every month. That interest equals the principal times the monthly rate (APR divided by twelve). A subsidized loan accrues nothing, because the government covers the interest during eligible deferment periods.
This rule, and the capitalization of unpaid interest when deferment ends, comes from Direct Loan Program regulation 34 CFR 685.202(b)(2). Federal Student Aid, part of the U.S. Department of Education, administers it. It applies to U.S. federal student loans only, not to lending generally.
$$\text{Accrued Interest (Unsubsidized)} = P \times \frac{APR}{12} \times \text{Deferment Months}$$
$$\text{New Principal} = P + \text{Accrued Interest}$$
$$\text{Monthly Payment} = \text{New Principal} \times \frac{r(1+r)^n}{(1+r)^n – 1}$$
That last step is the standard loan amortization formula. It’s the same method the Consumer Financial Protection Bureau uses to explain a fixed monthly payment on an amortizing loan. Here $r$ is the monthly rate and $n$ is the repayment term in months.
Three mistakes come up often. People enter the deferment length in years instead of months, which leaves a full year of interest uncounted for every year they get wrong. People type in a monthly rate instead of the annual APR.
And people pick “Subsidized” for a loan that isn’t actually eligible for interest-free deferment. Most private loans and Direct PLUS Loans accrue interest through deferment no matter what it’s called, so picking “Subsidized” for one of these hides how much you’ll really owe.
The loan amount must be greater than zero. The APR can be zero or higher. At 0%, no interest accrues during deferment, no matter what subsidization status you pick. The payment calculation then falls back to a simple straight line: principal divided by term. That’s because the compound formula would otherwise divide by a zero rate.
The repayment term must be greater than zero, since a zero-month term makes the payment undefined. The deferment period can be zero. That just skips accrual and computes an immediate repayment schedule.
Real federal deferments typically run from a few months up to several years. Real repayment terms typically fall between 5 and 30 years. A deferment or term far outside that range still computes, but it doesn’t match any real lending product.
A 2022 Department of Education rule took effect July 1, 2023. It eliminated interest capitalization for several events that used to trigger it: entering repayment, exiting most income-driven repayment plans, and exiting forbearance. But it left one trigger standing: deferment-end capitalization on unsubsidized loans, which is exactly what this calculator models.
That’s still written into 34 CFR 685.202(b)(2). These figures are estimates based on the amount, rate, and periods you enter. They’re not a substitute for the actual capitalized balance your loan servicer will calculate. Use them for general planning and education, not as personalized financial, tax, or student loan counseling advice.
How Subsidized and Unsubsidized Balances Diverge During Deferment
A subsidized balance carries into repayment unchanged. An unsubsidized balance also stays flat during deferment, since interest accrues separately from the balance. But it jumps up in one step the moment deferment ends, when unpaid interest capitalizes into principal.
Current Federal Direct Loan Interest Rates and Fees
| Loan Type | Interest Rate | Disbursement Window |
|---|---|---|
| Direct Subsidized / Unsubsidized (undergraduate) | 6.52% | July 1, 2026 – June 30, 2027 |
| Direct Unsubsidized (graduate / professional) | 8.07% | July 1, 2026 – June 30, 2027 |
| Direct PLUS (parent and graduate) | 9.07% | July 1, 2026 – June 30, 2027 |
| Origination fee (Subsidized, Unsubsidized, and PLUS) | 1.057% | Loans disbursed through September 30, 2027 |
Source: U.S. Department of Education / Federal Student Aid. These fixed rates come from the Higher Education Act formula, based on the May 12, 2026 10-year Treasury note auction. Once a loan is disbursed, its rate is fixed for the life of the loan. New loans get a new rate every July 1. Confirm the current figure at studentaid.gov before relying on it for a loan disbursed outside this window.
Common Questions About Deferred Loan Payments and Capitalization
Does deferment on a subsidized loan increase what I owe?
No. Subsidized federal loans don’t accrue interest during eligible deferment periods. The balance entering repayment equals the original amount borrowed, unaffected by the deferment itself.
What’s the difference between deferment and forbearance for capitalization purposes?
Unpaid interest still capitalizes at the end of a deferment on an unsubsidized loan under current regulation. But a separate 2022 rule change removed capitalization when you exit most forbearance periods. So two similar pauses in payment can be treated differently.
Can I avoid capitalization on an unsubsidized loan during deferment?
Paying the interest as it accrues, even in small amounts, prevents it from capitalizing. Only interest that’s still unpaid at the end of the deferment period gets added to principal.
Does this calculator apply to private student loans?
The math applies to any loan with an interest-only deferment window. But the “subsidized” option specifically reflects a feature of federal Direct Subsidized Loans. Most private loans accrue interest throughout deferment no matter how they’re marketed.
Why didn’t the 2023 rule change eliminate capitalization for my deferment?
The 2022 Department of Education rule, effective July 1, 2023, removed triggers like entering repayment or exiting forbearance. But it left deferment-end capitalization on unsubsidized loans in place, under 34 CFR 685.202(b)(2). That’s the exact scenario this calculator models.
Is the interest rate fixed, or does it change once repayment begins?
Federal Direct Loan rates are fixed for the life of the loan once disbursed. The rate applied during repayment is the same rate that accrued interest during deferment, not a new rate set when repayment starts.