Why a Student Loan Payment Calculator?
Our student loan payment calculator works out how much your monthly payments will be on federal student loans or private student loans.
This tool is useful for anyone looking to plan their college finances or organize their payments on an existing loan.
Whether it be comparing financial aid bundles or budgeting, a student loan calculator has something for everyone.
Understanding the Student Loan Calculator
In order to use the college loan calculator, you’ll need a few details on hand. Here they are below:
- Loan Amount – The calculator will prompt you to enter a figure that corresponds to your loan balance. Here, you should enter the amount that you owed on a single loan. That means that one at a time, you should only enter the amount owed per loan, even if you have more than one. After every result has been generated, repeat the process for every loan that you have.
- Interest Rates – Once you’ve input the amount on a single loan, enter the interest rate on that loan. When it comes to interest rates, there is no one size fits all. This is something that you will be aware of if you have multiple loans as chances are, you’ll have a different interest rate per loan. There are various factors that affect the loan’s interest rate, such as the year you took it, whether it’s federal or private and even your credit score. Irrespective of whether you have a private or federal loan, each one will accrue interest daily.
- Subsidized vs Non-Subsidized Loan – The calculator also requests that you state whether your loan is subsidized by the government or not. This information is important as it plays a role in the amount of interest that you pay when the repayment plan period commences. With a subsidized student loan, the government takes care of the interest accrued while you are at school as well as six months after your program has completed. If your loan isn’t subsidized, the total amount of interest accrued while you’re at school will be added to the amount owed on the loan. In order to get the government to subsidize your loan, you need to meet specific financial requirements.
Making Sense of Your Results
Once you have input the information, the student loan payment calculator will churn out your results. Among them, you will find the following:
- Amount For Monthly Payments – The calculator tells you how much you should be paying monthly on your loans. That said, the system provides an estimate of your monthly payments. Therefore, you ought to use the amounts generated from the calculator as a guide for financial planning and not to substitute the official amounts stipulated by the loan company.
- Amount Taken – This is the figure that you took out on the loan. Remember that if you have multiple loans, the sum of those loans will not appear at this stage. Instead, you would have to follow the steps listed above to get the results on each specific loan you’ve taken out.
- Accrued Interest at School – In addition, the college loan calculator lets you know the total interest accrued during your time at school as well as during the 6-month grace period.
- Updated Total Amount – The system also tells you the total amount that you have to repay as of that date. This is inclusive of the amount that you borrowed as well as the accrued interest. Please note that that amount does not include the extra daily accrued interest payments.
Developing a Loan Repayment Strategy
Now that you know the amount that you need to repay, it’s time to develop a strategy that will allow you to clear yourself of debt.
And not just any strategy. You need something that will help you pay off student loans fast.
There are several financial tips that you can try out to weather the storm of student loan repayments, like:
1. Taking Advantage of Lump Sum Payment – Just because you have a minimum amount to put down on your monthly payments doesn’t mean that you can’t put down more. After all, the more you put towards your loan repayment, the less you have to pay in accrued interest. If it won’t be too detrimental in your pocket, consider putting some more money on your repayment term. This is even truer if you get a windfall. Be wise and use that extra cash to end the life of the loan.
2. Employer Student Loan Contributions – Today, one of the most sought-after perks is an employer paying student loans. It also happens to be trendy. Employers are aligning with student loan repayment companies that offer plans to get their staff with student loans on the path to financial freedom. Some of these companies even allow employers to make contributions to their staff’s student loan payments. One such company is FutureFuel. Partnering with a company that offers this type of perk is one of the fastest ways to get rid of your student debt once and for all.
- Pay Interest While You’re At School – In the event that your loan is not subsidized, you can consider making payments on your student loans even while you’re at school. That way, you can reduce the total amount that you need to repay when you’re done studying.
Having said that, you shouldn’t stretch your finances more than you should. If you know that you can’t afford to make those extra payments, don’t bother. It’s better to be financially stable than to bite off more than you can chew.