GLOSSARY · DEBT & HOUSING

Capitalized interest

Unpaid interest that is added to a loan's principal, so that interest is then charged on it as well. On student loans it can happen at set events, such as leaving Income-Based Repayment or when a private loan enters repayment. Paying interest as it accrues, even during school, prevents it.

Also called: interest capitalization, capitalization

COMPUTE IT WITH YOUR NUMBERS

Debt payoff planner →If I put $X/month toward my debts, when am I debt-free and which order saves most?

LEARN IT PROPERLY

CHAPTER · STUDENT LOAN STRATEGIES · DEEP DIVEFederal and Private Loans: Know What You Owe CHAPTER · STUDENT LOAN STRATEGIES · DEEP DIVEFederal Repayment Plans After the 2025 Law

RELATED TERMS

Compound growth Income-driven repayment

SOURCES

Interest Rates and Fees for Federal Student Loans. U.S. Department of Education, Federal Student Aid.

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