How to Start to Pay Interest on Your Unsubsidized Loan

by Kristen May ; Updated July 27, 2017

The main difference between subsidized and unsubsidized student loans is that the government pays all interest that accrues on a subsidized loan while payments are deferred, including when you are in school. On the other hand, if you have an unsubsidized loan, interest accrues from the day you borrow the money. You can defer payments while you are in school, but the interest will be added to your loan balance when you start to repay the loan. Keep your loan balance low by starting to pay interest on your unsubsidized loan before you have to.

Step 1

Look up your lender for federal student loans, if you do not know who it is, through the National Student Loan Data System (see Resource). Contact your school's financial aid office to find out who your lender is for private student loans.

Step 2

Call your lender or log onto the lender's online account management system.

Step 3

Set up automatic monthly payments of an amount equal to the interest that accrues on your loan balance each month. The lender can tell you what the amount is, but in general, it will be approximately equal to the amount you borrowed times the interest rate, expressed as a percent, divided by 1200. For example, your monthly interest on a loan for $6,500 at 6.8 percent interest would be approximately $36.83.

Step 4

Make interest payments online, over the phone or by check whenever you can afford to. You can do this in addition to or instead of making automatic payments.


  • If you allow interest to accrue on your unsubsidized loan, it will be capitalized, meaning that it is added to your loan balance when your repayment period begins. After this, your interest charges and monthly payments will be based on your new, higher loan balance.


  • Credit card interest is generally more expensive to pay than student loan interest, so if you have credit card debt, pay that off before you make student loan interest payments.

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