Compare current student loan terms against refinancing options to see potential savings in monthly payments and total interest.
Refinancing replaces your existing student loans with one new private loan at a different rate and term. This tool takes your current balance, rate, and remaining term, plus the offer's rate and term, and amortizes both loans so you can compare monthly payment and total interest side by side. The surprise for most users: a lower monthly payment is not the same as saving money. If the new term runs longer than your remaining term, the payment drops even at a higher rate while total interest rises. Read the interest columns, not just the payment.
A concrete input and expected output from the current implementation.
Input
Current loan: $30,000 balance, 6.5% APR, 10 years remaining. Refinance offer: 4.5% APR for 10 years.
Expected output
Current loan: $340.64 per month, $10,877 total interest. Refinanced: $310.91 per month, $7,309 total interest. Savings: $29.73 per month, $3,568 total interest over the 10-year term.
Both loans run the same 120 months, so the saving comes purely from the 2-point rate drop: first-month interest falls from $162.50 to $112.50. With the term unchanged, that monthly saving carries straight through to the lifetime interest total.
Both loans are amortized with the standard fixed-rate formula: payment = balance x (r x (1+r)^n) / ((1+r)^n - 1), where r is the annual rate divided by 12 and n is the number of monthly payments. Each month, interest is charged on the remaining balance and the rest of the payment reduces principal, so early payments are mostly interest and later ones mostly principal.
The tool builds a full payment schedule for your current loan from the balance, rate, and remaining term, and a second schedule for the refinanced loan from the offer's rate and term. It reports the monthly payment, total paid, and total interest for each, plus the differences. The savings figure is the lifetime interest difference, assuming both loans run to completion.
No. The payment can fall just because the new term is longer than your remaining term. Compare the total interest figure: with a longer term, interest can rise even when the rate drops. The tool shows both loans side by side, so check payment and interest together, and for federal loans also weigh the protections you would lose.
For the same balance, rate, and term, the amortization math is exact, so the payments should match. Differences come from the inputs, not the tool: the rate you are actually approved for, a different term, or fees the lender adds. Re-run the calculator with the quoted rate and term to see the comparison you will really get.
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