Capitalized Interest: How Does It Work?
Interest capitalization happens when unpaid interest gets added onto your principal loan balance. It can make your loan more expensive, but there may be ways to avoid it.
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Rebecca has more than eight years of experience in personal finance. Her work has been featured by CNN, U.S. News & World Report, New York Post, and Buy Side WSJ.
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Renee Fleck is a student loans editor with over six years of experience. Her work has been featured in Fast Company, Morning Brew, and Sidebar.io, among other online publications. She is fluent in Spanish and French and enjoys traveling to new places.
Updated September 17, 2024
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