Student Loan Refinance Savings Calculator
This calculator shows the total interest saved over the full life of your loan when you refinance from your current rate to a lower one. Enter your balance, existing rate, refinance offer, and term length. On a ten-year repayment, even a single-point reduction on a six-figure balance translates to thousands of dollars in savings.
New monthly payment
You pay today, so that is a month back in your pocket.
That is more than the you pay today — the shorter term costs more each month but clears the debt sooner.
- Over the whole termStay putRefinance
- Monthly payment
- Interest you pay
- Debt-free
- Total paid
No switching cost to earn back — you are ahead from the first payment, by over the life of the loan.
You earn the switching cost back after payments — around .
At these numbers the new loan never pays for itself: the monthly payment does not fall.
Careful — the lower payment comes from a longer term. Over the full term this deal costs more than staying put.
Both loans are modelled as fixed-rate, fully amortising, with no missed months. A refinance replaces your loan with a brand-new private loan — see what that costs you below.
Rate drop
Monthly change
Interest saved
Lifetime saving
What you give up when federal loans go private
- Income-driven repayment. A private lender sets one payment; it does not fall when your income does.
- Federal forgiveness programmes, including Public Service Loan Forgiveness and any income-driven forgiveness after the full repayment term.
- Federal discharge on death or total and permanent disability — private lenders decide their own policy.
- Federal deferment and forbearance rights, and the federal rehabilitation route out of default.
- The decision is one-way. Once a federal loan is refinanced privately, it cannot be turned back into a federal loan.
Refinancing private loans into a cheaper private loan gives up none of this — it is federal balances that carry the risk.
How Small Rate Drops Compound Over Years
Interest on student loans accrues daily. The formula is straightforward: outstanding principal multiplied by the annual rate divided by 365.25. A lower rate reduces that daily charge from the first day of the new loan, and because each payment applies more toward principal at the reduced rate, the effect compounds over time. The gap between the two scenarios widens with every passing month.
On an illustrative $70,000 balance, moving from 7.0% to 5.5% on a ten-year term drops the daily interest charge by roughly $2.88. That may sound small, but over 120 months the accumulated savings reach several thousand dollars. The calculator shows both the per-month difference and the lifetime total so you can see the compounding effect clearly. Larger balances and longer terms amplify the savings; shorter remaining terms shrink them. Enter your actual numbers to see where your loan falls on that spectrum.
When Savings on Paper Disappear in Practice
The headline savings figure assumes you hold the new loan for its full term at the stated rate. Two common situations erode that number. First, if you extend your term during refinancing, the lower rate reduces the per-dollar cost of interest, but the additional months add interest charges that can partially or fully offset the savings. The calculator flags this by displaying total interest under both the original and refinanced terms.
Second, refinancing federal loans into a private loan permanently removes access to income-driven repayment, PSLF, forbearance, and disability discharge. If a life event forces you into financial hardship, you cannot fall back on federal protections and may face default. Borrowers on student-loan forums report that paper savings meant little once they lost access to forbearance during an income gap. Compare the savings number against the value of the protections you hold. For a break-even timeline that factors in closing costs, see the break-even calculator.
Rate and balance examples are illustrative. Actual savings depend on lender terms and your repayment behavior. This is not a loan offer.
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Related student loan calculators
- Student Loan Refinance Break Even Calculator
- Student Loan Refinance Term Comparison
- Is Student Loan Refinancing Worth It? 2026 Calculator
Sources
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Sources: standard amortization formula (daily interest = principal x APR / 365.25); ed.gov federal loan protections; r/StudentLoans refinancing outcomes.
- Federal Direct Consolidation Loan interest rate — the weighted average of the loans being consolidated, rounded up to the nearest one-eighth of one percent (Federal Student Aid, studentaid.gov, Loan Consolidation).
- Amortisation, daily interest accrual and payoff arithmetic — standard loan mathematics; every figure on this page is computed from the numbers you enter.