How this calculation works
The first period keeps principal fixed and accrues simple daily interest. At repayment start, the model adds unpaid interest once and uses monthly fixed-payment amortization from the new balance.
Accrued interest = principal × annual rate × days / 365. Repayment starts from principal plus unpaid capitalized interest.A worked example
A 20,000 balance at 6% accrues 1,200 in 365 days. Paying 300 during the period leaves 900 capitalized and a starting repayment balance of 20,900.
Good to know
This is an entered capitalization scenario. Whether interest accrues or capitalizes depends on your loan type and event. Check official terms and your servicer’s balance.
Reference: Federal Student Aid loan interest guidance (opens in a new tab) ↗
How the inputs affect the result
Separate accrued interest and principal from your loan statement. If several loans have different disbursement dates, calculate each one separately before combining their repayment budgets.
Full interest payment leaves the initial principal unchanged at repayment start.
Where the calculation applies
This is an entered capitalization scenario. Whether interest accrues or capitalizes depends on your loan type and event. Check official terms and your servicer’s balance.
For a related calculation, see the EMI and fixed loan payment calculator.
Read more: Federal Student Aid loan interest guidance (opens in a new tab) ↗
A few questions, answered
How do I show an interest-free deferral?
Set days and interest paid to zero to model no pre-repayment accrual while keeping the actual repayment rate.
What does the “Pay all accrued interest” setting illustrate?
Full interest payment leaves the initial principal unchanged at repayment start.