interest on an unsubsidized loan

sk8rmom
Thu, 02 Sep 2010 20:30:56 +0000

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:

Cost of Interest Capitalization Calculator

Initial Loan Balance: $1,000.00
Loan Interest Rate: 6.80%
Loan Term: 10 years
Minimum Payment: $50.00
Deferment (Months): 48
Capitalization Frequency: Quarterly

After the deferment period of 48 months, the new loan balance is $1,309.59 , including $309.59 in accrued interest.