Deferred Payment Loan Calculator

A payment deferment can create breathing room, but it rarely makes a loan cost disappear. This calculator shows what happens when scheduled payments are paused for a fixed number of months. It estimates the original monthly payment, the balance after deferment, the interest during deferment, the new payment or repayment length, and the extra interest compared with making payments without a deferment. The compute logic covers three interest treatments and three post-deferment repayment plans, so the page can model a wide range of personal, student, auto, mortgage, and business-loan conversations.

Use this page when the question is, “What will the pause cost me later?” If you are comparing a new borrowing decision, start with the loan calculator. If the deferred loan is a home loan, use the mortgage calculator for the full payment context. If you need to know today’s principal before requesting relief, use the loan-balance calculator.

How to use this calculator

Enter the current loan balance, annual interest rate, remaining term, and number of payments deferred. The calculator rounds the remaining term to whole months and caps the deferred months at one less than the original number of months, so there is always at least one repayment month left.

Choose one interest treatment:

Then choose one repayment plan:

Formula used by the calculator

The original payment is the fixed amortizing payment for the current balance:

$\text{original payment} = \frac{\text{balance} \times \text{monthly rate}}{1 - (1 + \text{monthly rate})^{-\text{original months}}}$

For capitalized deferment, the balance after the pause is:

$\text{balance after deferment} = \text{balance} \times (1 + \text{monthly rate})^{\text{deferred months}}$

For interest paid monthly during deferment, the interest paid during the pause is:

$\text{interest during deferment} = \text{balance} \times \text{monthly rate} \times \text{deferred months}$

After deferment, the calculator either recalculates an amortizing payment for the selected repayment months or, under the original-payment option, solves for the number of months needed at the original payment:

$\text{repayment months} = \left\lceil \frac{-\log(1 - \frac{\text{monthly rate} \times \text{balance after deferment}}{\text{original payment}})}{\log(1 + \text{monthly rate})} \right\rceil$

If the original payment is not high enough to cover monthly interest on the new balance, the original-payment scenario is invalid because the balance would not amortize.

Example: a loan with deferred payments

Use a $100,000 loan balance, 6% annual interest, 10 years remaining, 12 deferred payments, capitalized interest, and the original payoff date. The monthly rate is 0.5%, and the original term is 120 months. The original monthly payment is $1,110.21, and the no-deferment interest over the remaining term is $33,224.60.

During the 12-month deferment, the calculator compounds the balance monthly: $100,000 × 1.005^12 = $106,167.78. Interest during deferment is therefore $6,167.78. Because the original payoff date is preserved, only 108 months remain after the pause. Re-amortizing $106,167.78 over 108 months at the same monthly rate gives a new payment of $1,274.62.

The deferred scenario’s total interest is higher than the original schedule by $4,434.77. The extra interest is lower than the capitalized interest amount because the no-deferment comparison would also have charged interest during those 12 months; the relevant comparison is the whole remaining schedule, not just the skipped-payment window.

How it helps borrowers

The calculator separates short-term relief from long-term cost. A deferment may protect cash flow after job loss, medical expense, seasonal business disruption, or a temporary income gap. But the later payment can rise if the payoff date is unchanged, and total interest can rise if the term is extended. Seeing both effects helps borrowers decide whether to defer all payments, pay interest during the pause, use savings for partial payments, or request a different relief option.

It also helps compare lender offers. One offer may capitalize interest and keep the payoff date. Another may extend the term and keep the payment closer to the old amount. A third may allow an interest-free pause. The headline “skip 12 payments” is not enough; the balance after deferment, new payment, and extra interest show the real tradeoff. For household planning, pair this result with the budget calculator and the debt-to-income calculator.

Caveats before signing deferment terms

Real deferment agreements are contract documents. Student loans, auto loans, mortgages, and business loans use different rules. Some loans continue to accrue interest daily. Some subsidized programs cover interest for qualifying periods. Some lenders add fees or require escrow payments even while principal and interest are deferred. Credit reporting, maturity date, and eligibility rules can matter as much as the math.

This calculator assumes a fixed annual rate, monthly compounding, no fees, and regular amortization after the pause. It does not model missed-payment delinquency, forbearance alternatives, loan modification, escrow shortages, or tax consequences. Request written terms and compare the lender’s figures with this estimate before accepting a deferral.

Sources

• Consumer Financial Protection Bureau, Tips for student loan borrowers — guidance discussing repayment, interest, and borrower options.
• Consumer Financial Protection Bureau, What is negative amortization? — explanation of balances increasing when unpaid interest is added.
• Federal Student Aid, Interest Capitalization — federal student-loan explanation of capitalization and interest added to principal.