Why does my balance feel like it isn’t going down?

Early payments are interest‑heavy because interest is charged on today’s balance. As principal falls, more of each payment goes to principal. Extra payments accelerate this shift.

Why does my balance feel like it isn’t going down?

Early payments are interest‑heavy because interest is charged on today’s balance. As principal falls, more of each payment goes to principal. Extra payments accelerate this shift.

Do mid‑cycle payments help?

Yes. Because interest accrues daily, any principal paid today reduces tomorrow’s interest. You don’t need to wait for the due date to benefit.

Do mid‑cycle payments help?

Yes. Because interest accrues daily, any principal paid today reduces tomorrow’s interest. You don’t need to wait for the due date to benefit.

What’s the best way to prioritize multiple loans?

Target the loan with the highest daily cost (equivalent to the highest APR × balance). This is the avalanche method and minimizes total interest.

What’s the best way to prioritize multiple loans?

Target the loan with the highest daily cost (equivalent to the highest APR × balance). This is the avalanche method and minimizes total interest.

Loan Daily Cost Calculator

Calculate how much your loan costs per day to visualize debt impact and stay motivated to pay it off

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Methodology & Sources

Daily Interest Calculation

Student Loan Grace Period

Interest Capitalization

Average Loan Rates (2025)

This calculator helps you understand your loan cost in concrete, daily terms by showing how much interest accrues each day.

Most loans calculate interest using simple daily interest: (Balance × Annual Rate) ÷ 365 days. This gives you the cost per day.

Source: CFPB - How Interest is Calculated

Federal student loans have a 6-month (180-day) grace period after graduation. During this time, interest accrues daily on unsubsidized loans and capitalizes (adds to principal) when repayment begins.

Source: Federal Student Aid - Grace Period

When unpaid interest is added to your loan principal, it's called capitalization. This increases your balance and future daily interest cost. Happens after grace periods, deferment, and forbearance.

Source: Federal Student Aid - Capitalization

Federal Student Loans: 5.50% - 8.05%
Private Student Loans: 4.50% - 14.00%
Auto Loans: 5.00% - 10.00%
Personal Loans: 6.00% - 36.00%

Source: Federal Reserve - Consumer Credit Statistics

Disclaimer: This calculator provides estimates based on standard simple interest calculations. Actual costs may vary based on your loan terms, payment timing, and compounding method. Always consult your loan agreement.

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Why Daily Cost Matters More Than APR

💡 The Daily Subscription Analogy

When you see "6.5% APR," it's just a number. But when you realize that means $4.46 every single day on a $25,000 loan, it becomes real. That's $134/month, $1,628/year—money that could go toward savings, paying off principal, or enjoying life.

Think of your loan interest like a subscription service you never use:

• $1-2/day: Like paying for a streaming service you don't watch
• $4-6/day: Like buying lunch you throw away every day
• $10+/day: Like renting an apartment you never visit

When you frame loan interest as a daily expense, it's much easier to stay motivated to eliminate it.

How to Use This Calculator

1. See Your True Daily Cost

2. Calculate Grace Period Impact (Student Loans)

3. Analyze Extra Payment Impact

4. Track Your Progress

Enter your loan balance and interest rate to see how much you're "spending" on interest every single day. Use this to build awareness and urgency.

If you have student loans, use the grace period calculator to see how much interest will accumulate during your 6-month grace period. This can motivate you to make interest-only payments.

See how making an extra payment reduces your daily cost going forward. Every $1,000 you pay off saves you money every single day for the rest of the loan.

Come back regularly to update your balance and celebrate as your daily cost decreases. Set a goal: "I want to reduce my daily cost by $1."

Real-World Examples

Example 1: Average Student Loan

Example 2: Auto Loan

Example 3: Personal Loan

Balance: $30,000
Rate: 5.50% APR

📅 Daily cost: $4.52
📆 Monthly cost: $135.60
📅 Yearly cost: $1,650
🎓 6-month grace period: $813 capitalizes

Making interest-only payments during grace ($136/month) saves $1,200+ over the life of the loan.

Balance: $18,000
Rate: 7.50% APR

📅 Daily cost: $3.70
📆 Monthly cost: $111
📅 Yearly cost: $1,350

$3.70/day equals 2.7 gallons of gas. Your car loan interest could fuel several extra trips per week!

Balance: $10,000
Rate: 12.00% APR

📅 Daily cost: $3.29
📆 Monthly cost: $98.70
📅 Yearly cost: $1,200

At $3.29/day, you're paying the equivalent of a daily latte just to keep this debt. Paying it off eliminates this daily expense.

What to Do With This Information

✅ Motivation Template

💰

Make Interest-Only Payments During Grace Period

If you have student loans, paying just the daily interest during grace period ($4.52/day = $136/month) prevents capitalization and saves hundreds over the loan life.

📊

Track Your Daily Cost Reduction

Every payment lowers your daily cost. Use this as motivation: "My loan used to cost $5/day, now it's $3/day—I'm making progress!"

🎯

Set Mini-Goals

Aim to reduce your daily cost by $1. On a $25,000 loan at 6.5%, that means paying down $5,616—a clear, achievable target.

🔄

Prioritize High Daily Cost Loans

If you have multiple loans, focus extra payments on the one with the highest daily cost. This is the debt avalanche method—mathematically optimal.

Use this mental model to stay motivated:

"Right now, my loan costs me [daily cost] every single day. That's money I could spend on [something you care about]. By paying an extra [amount] per month, I'll save [yearly savings] per year and get out of debt [months faster]."

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Take control of your debt with these powerful calculators:

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Frequently Asked Questions

Common questions about the Loan Daily Cost Calculator

Most installment loans use simple daily interest: (Balance × Annual Rate) ÷ 365. This gives the cost per day; payments reduce balance and therefore tomorrow’s interest.

Learn More

Federal Student Loan Interest Rates (2024-2025)

• Undergraduate Direct Loans: 6.53%
• Graduate Direct Unsubsidized: 8.08%
• Direct PLUS Loans: 9.08%

→Source: Federal Student Aid - Interest Rates(2024-2025)

Income-Driven Repayment Plans

• SAVE Plan: 5% of discretionary income (undergraduate), 10% (graduate), 0% below 225% FPL
• PAYE Plan: 10% of discretionary income, capped at 10-year standard
• IBR Plan: 10-15% of discretionary income based on loan date
• ICR Plan: Lesser of 20% discretionary income or fixed 12-year payment

→Source: Federal Student Aid - Income-Driven Repayment Plans(2025)

Public Service Loan Forgiveness (PSLF)

• Requires 120 qualifying monthly payments (10 years)
• Must work full-time for qualifying employer (government/non-profit)
• Remaining balance forgiven tax-free after 120 payments

→Source: Federal Student Aid - PSLF Program(2025)

Average Student Loan Debt (Class of 2023)

• Bachelor's degree borrowers: $28,950 average debt
• Total outstanding student loan debt (U.S.): $1.75 trillion
• Average monthly payment: $200-$299 for most borrowers

→Source: Education Data Initiative - Student Loan Debt Statistics(2023)

Refinancing Rates (2025)

• Private refinancing rates: 4.5% - 9.5% (varies by credit, term)
• Note: Refinancing federal loans means losing federal protections (IDR, PSLF, forbearance)

→Source: CFPB - Student Loan Refinancing(2025)

Important

Student loan rules change frequently. Always verify current program requirements at StudentAid.gov before making decisions.

⚠️ Important