Calculator inputs
Example data table
| Scenario | Loan | APR | Term | Paid | Deferral | Mode | Strategy | Typical outcome |
|---|---|---|---|---|---|---|---|---|
| Starter example | $25,000 | 11.5% | 60 mo | 12 mo | 3 mo | Skip | Keep term | Higher payment later, more interest overall |
| Interest-only bridge | $25,000 | 11.5% | 60 mo | 12 mo | 3 mo | Interest-only | Keep payment | Lower short-term strain, smaller balance jump |
| Fixed reduced payment | $25,000 | 11.5% | 60 mo | 12 mo | 3 mo | Fixed ($250) | New term (72) | Smoother payments, longer timeline possible |
Formula used
Monthly interest rate: r = (APR ÷ 100) ÷ 12
Monthly payment (fully amortizing): PMT = P · r ÷ (1 − (1+r)−n) (when r = 0, PMT = P ÷ n)
Balance after k payments: Bk = P(1+r)k − PMT · ((1+r)k − 1) ÷ r
Deferral simulation: each month applies interest I = B · r, then updates balance B′ = B + I − payment. Interest-only pays payment = I.
How to use this calculator
- Enter the original loan amount, rate, term, and months already paid.
- Choose how many months you plan to defer payments.
- Select a deferral mode: skip, interest-only, or fixed payment.
- Set any one-time fee, and decide if it is added to balance.
- Pick what happens after deferral: keep term, keep payment, or new term.
- Press Calculate impact to view totals, dates, and schedule.
- Use CSV or PDF buttons to export your scenario.
Deferral cashflow profile
This calculator compares your normal schedule against a temporary pause window. In the example table, a $25,000 balance at 11.5% APR over 60 months produces a fixed installment, then measures relief across a 3‑month deferral. Cashflow relief equals the base payments you avoid minus any deferral payments and upfront fees, so the number can be positive, near zero, or negative. For transparency, the results show total interest from today, payoff month, and balance after deferral. Use the chart to compare trajectories and spot the point where the deferral path converges. Small changes in APR can matter materially.
Balance growth during pauses
When payments are skipped, interest still accrues each month: I = B × r. With r = APR/12, the balance increases by roughly B × r per month before compounding. Interest‑only mode sets payment = I, keeping the balance almost flat. A reduced fixed payment can partially offset interest, limiting growth while still improving short‑term liquidity.
Payment reset scenarios
After deferral, “Keep term” recomputes a new payment using the remaining months, which often raises the installment. “Keep payment” holds the original installment and extends the payoff month count until the balance reaches zero. “Use a new term” spreads the post‑deferral balance across a chosen horizon, helpful when you want predictable budgeting targets.
Fees and capitalization effects
A one‑time deferral fee can be paid upfront or added to principal. Capitalizing increases the balance and therefore future interest, while paying upfront reduces relief but avoids interest-on-fee compounding. The schedule table highlights the phase for each month, so you can see exactly when the fee influences balances and when normal amortization resumes.
NPV lens for decision making
The NPV section discounts future payments to today using an annual rate you choose. PV is computed month by month: PV = Σ(payment ÷ (1+d)^t), where d is the effective monthly discount rate. If NPV change is positive, the deferral plan is more expensive in today’s dollars, even if near‑term cashflow improves.
FAQs
Does deferral always increase total cost?
Often, yes, because interest can accrue while you pay less. Interest-only deferrals can limit the increase. Fees, capitalization, and the post-deferral strategy can still raise lifetime cost even when short-term payments fall.
What is the difference between “Skip” and “Interest-only”?
Skip sets payment to zero, so interest is added to the balance. Interest-only pays the monthly interest amount, keeping the balance roughly stable. Both can change payoff timing depending on your chosen strategy.
How is cashflow relief calculated here?
Relief equals the sum of base-plan payments during the deferral months minus what you actually pay during deferral, including any upfront fee. A capitalized fee does not reduce relief immediately, but may increase later payments.
Why can the monthly payment rise after deferral?
If you keep the original payoff date, the remaining months stay the same while the balance is higher. The payment is recalculated to amortize the new balance over that shorter remaining window.
What if my lender changes the rate or extends the term automatically?
Use the “Keep payment” option to model an extended payoff, or “Use a new term” to set a target horizon. If the rate changes, rerun the calculator with the revised APR to estimate the new trajectory.
How should I choose the NPV discount rate?
Pick a rate that reflects your opportunity cost, such as a conservative return you could earn elsewhere or a budgeting hurdle rate. Higher discount rates make distant payments matter less, shrinking NPV differences between plans.