Deferred Payment Loan Calculator

A deferred payment loan calculator estimates your monthly payment, total interest, and the true cost of a loan that lets you postpone payments for a set period. Enter the loan amount, APR, deferment length, and term to see the balance after deferment and your amortized payment. Use it before accepting any deferment offer to compare the cost against paying immediately. This tool gives estimates only, not professional financial advice.

It depends on the loan. With accruing deferment, interest builds up each month and is added to your balance, so you later pay interest on interest. With non-accruing deferment, the balance is frozen and you resume payments on the original amount. Subsidized federal student loans are a common non-accruing example, while most auto and personal loans accrue interest during any deferment.

In accruing deferment, the balance grows by the formula P times (1 + r) to the power of d, where P is the principal, r the monthly rate, and d the number of deferment months. For example, a $10,000 loan at 6% APR deferred 6 months with accruing interest grows to about $10,304. In non-accruing deferment it stays at $10,000. The difference, plus the extra interest that accrues on the added balance over the remaining term, is the extra price of accruing deferment.

The true cost is the difference between total payments with deferment and total payments without it. Use the with-vs-without comparator above. Roughly, the cost has two parts: the deferred interest added to your balance during the pause, and the extra interest that accrues on that added balance over the rest of the loan term. Even a short deferment at a high APR can cost several hundred dollars on a mid-size loan.

They are related but not identical. Deferment is usually a scheduled, pre-agreed pause, such as student loan deferment while enrolled in school. Forbearance is typically granted for temporary hardship and is often shorter and less structured. Interest rules differ by loan type in both cases, so always check whether your specific loan accrues interest during the pause.

Federal student loans offer deferment for situations like school enrollment, military service, or economic hardship. Subsidized loans do not accrue interest during deferment, so the balance stays the same. Unsubsidized loans do accrue interest, and the unpaid interest is capitalized, meaning it is added to the principal when deferment ends, increasing future payments.

Usually yes, and it is a smart move. Any payment made during deferment goes straight toward principal or prevents interest from capitalizing, which shrinks the post-deferment balance and lowers your future payments and total interest. Paying even the monthly interest during deferment avoids the compounding penalty entirely.

Capitalized interest is interest that accrues during deferment and is added to the principal when the deferment ends. You then pay interest on that larger balance for the rest of the loan. This compounding effect is what makes accruing deferment noticeably more expensive than it first appears.

First compute the new balance: B = P times (1 + r) to the power of d if interest accrues, otherwise B = P, where r is the monthly rate and d the deferment months. Then apply the standard amortization formula: payment = B times r times (1 + r) to the power of n, divided by (1 + r) to the power of n minus 1, where n is the remaining loan term in months. The calculator above runs both steps automatically.

The mechanics are similar but the handling differs. Many mortgage deferrals move the missed payments to the end of the loan term or set them up as a separate balloon amount instead of capitalizing interest immediately. Interest rules vary by servicer and program, so confirm in writing whether interest accrues and how the deferred amount will be repaid.

A grace period is short, typically around 15 days, and usually an interest-free window to pay before a late fee applies. Deferment is a formal pause of several months or longer in which interest may accrue. They are not interchangeable, so do not assume a grace period protects you the way a formal deferment agreement does.

A properly arranged deferment that the lender reports as current generally does not hurt your credit score. However, missed payments reported as late during an informal or unapproved pause can damage it. Always get the deferment agreement in writing and confirm how the lender will report the account to the credit bureaus. This tool provides estimates only, not professional financial advice.