<p>I know the interest rate is 6.8%. But I want to know exactly how much interest will acrue on my unsubsidized loan if I defer paying the interest while I am in school. The loan is for 1,000 dollars. Can someone help me figure out how much interest will build on it every year?</p>
<p>Here’s a loan capitalization calculator you can play with…it depends on how long you’re deferring for. The interest on a $1K loan is under $6 a month…a small amount to pay if you want to avoid the extra charge!</p>
<p>[FinAid</a> | Calculators | Cost of Interest Capitalization Calculator](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid)</p>
<p>say I decide to defer the interest for 4 years until graduation. Will my interest amount to 6 dollars every month so 12 times 6=72 dollars for the first year meaning only 72 times 4=228 dollars added on to the 1,000? or will it double because I am not paying the interest while in school?</p>
<p>No, interest will accrue quarterly…meaning your loan balance will increase by the amount of interest added and that interest will, in turn, be charged interest the following quarter since your loan balance will be higher. If you used the link I gave you, you’d see the following result:</p>
<p>Cost of Interest Capitalization Calculator</p>
<p>Initial Loan Balance: $1,000.00<br>
Loan Interest Rate: 6.80%
Loan Term: 10 years
Minimum Payment: $50.00<br>
Deferment (Months): 48
Capitalization Frequency: Quarterly </p>
<p>After the deferment period of 48 months, the new loan balance is $1,309.59 , including $309.59 in accrued interest.</p>
<p>oh ok thats not so bad then. I have the funds to pay it off right now so i’m just trying to decide if I should pay the whole loan off now or save the moe to buy a car</p>
<p>Well, it’s up to you but you’ll be increasing the original loan by nearly 1/3 by deferring the interest. Why not keep the $1k in case you need it but pay the $6/month to keep the interest from building up?</p>
<p>your right. I think thats what I’ll do</p>
<p>Ok sorry to be so pessimistic but it looks like if i do decide to just pay 6 bucks every month for the next four years ill end up paying 288 dollars in interest. So really, paying that interest now would only save me 21 dollars in the long run…</p>
<p>Yes, but is that really the only $1000 you’ll be borrowing for all four years?</p>
<p>At first no. I would have another 1,000 dollar scholarship for next semester too and I’m sure there would be more throughout the next four years but after this semester I’m transferring to a community college. Trying to live on campus whill going to school is just too expensive and I desperately need to save money. So basically, that 1,000 is going to be the only unsubsidized loan im going to have. So since waiting to pay it off wont cost me too much I’d rather save this 1,000 dollar scholarship I have for something I need right now.</p>