Capitalisation of interest means that the interest on your student loan is added to your outstanding loan principal. This takes place twice a year, on 15 June and 15 December. In practice, this means that the interest accrued over six months is added to your loan principal each time. Interest is capitalised for the last time in the academic term following the last month in which you receive student financial aid. Interest is capitalised for as long as Kela pays you student financial aid. Once you no longer receive student financial aid, these interest payments will be charged twice a year, on 15 June and 15 December, which means you pay interest for six months in one go. These payments will be repeated 2–3 times before you start repaying your student loan. Once you start repaying your student loan, the interest payments will be included in your monthly loan repayments.  Your monthly loan repayment will then comprise the interest, margin and instalment. Read more about the repayment of student loans. Read more about interest subsidy on Kela’s website.