Income-Driven Repayment vs. Refinance Analyzer

Estimate the monthly payment gap between staying on an income-driven repayment plan and refinancing into a fixed-rate private loan. The tool applies a flat IDR percentage to your discretionary income, calculates the amortised refinance payment, and reports which option is cheaper per month.

Outstanding principal you would refinance.
Taxable income minus the protected amount used for IDR calculations.
Fixed annual percentage rate offered by the refinance lender.
Length of the new loan in years.
Optional. Leave blank to assume 10% of discretionary income; adjust for plans like SAVE (5%) or PAYE (10%).

Results are estimates. Consult your loan servicer or financial advisor for personalised repayment guidance.

Examples

  • $52,000 balance, $68,000 discretionary income, 4.20% APR over 20 years, IDR at 7.25% ⇒ Result: $90.22 more per month on IDR
  • $95,000 balance, $54,000 discretionary income, 5.00% APR over 12 years, IDR default 10% ⇒ Result: -$428.65 (refinancing costs $428.65 more each month)

FAQ

Does this calculator include tax filing status or family size adjustments?

No. Enter the already adjusted discretionary income figure from your loan servicer so the comparison stays accurate.

How do I handle interest subsidies on IDR plans?

Interest subsidies are not included. If your plan covers unpaid interest, treat the IDR payment as effectively lower when comparing lifetime costs or include the forgiven interest in a separate cash-flow table.

What if I plan to seek Public Service Loan Forgiveness (PSLF)?

PSLF depends on staying in a qualifying IDR program. A refinance would disqualify you, so weigh the present value of potential forgiveness and employer certification before moving to a private loan.

Additional Information

  • Positive results mean the IDR payment is higher than the refinance payment; negative values indicate refinancing would raise your monthly bill.
  • Outputs are shown in USD per month with two decimals to mirror loan statements.
  • IDR percentage defaults to 10% of discretionary income, mirroring PAYE and old REPAYE. Adjust to 5% for SAVE undergraduate loans or 15% for IBR where applicable.
  • The refinance payment calculation assumes fully amortising fixed-rate repayments with no origination fees or borrower benefits.
  • Discretionary income is simplified as a single input. Actual federal formulas subtract 225% of the poverty line based on household size.
  • Result unit: USD per month

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