Many students struggle with the idea of having to repay college loans. When deciding whether a student loan is a viable options, some questions to consider are:
Luckily, CollegeToolkit has helpful calculators that can help students to answer questions like these.
All you have to enter is the amount of the loan you received (or could get), interest rate, term (how long you have to repay it, or hope to repay it in) and the minimum required monthly payment to pay off the loan in the term you specified.
Easy right? After a little research, the Loan Repayment Calculator is a helpful tool will is an amazing resource as it will show you how many student loan payments you will need to make, how much each payment will be, and how much money overall the term of repayment will go towards interest.
Try playing with different terms to see that a shorter term means higher monthly payments, but less interest is paid overall.
As previously mentioned, the Loan Repayment Calculator can help students compare loans for the best options based on interest rates and terms provided by lenders, as well allowing you to experiment with what monthly payments will allow you to pay off your loan quicker. However, it can help in another way. It's hard for students to put student loans into perspective because repayment seems so far away.
Many first-time student loan recipients are unaware of the full cost of the loan once interest is added as it just seems like some far-off and abstract concept. The Loan Repayment Calculator can break it down into numbers that are easier to digest, bringing students back to reality. This calculator really puts into perspective that it could take 10 years of monthly payments to repay that $25,000 loan, and all-the-while interest will accrue tacking on an additional $9,064 to the total amount of the loan (at an interest rate of 6.5%).
By better understanding the responsibility you are taking on with a student loan, or that a student you know is taking on, you may think twice about how much you actually need and be more diligent about picking a degree program that can help you repay this loan after graduation!
With student loans, whether they are private student loans or federal, it is best to only take out what you need in loans, to reduce the amount of interest being added to the balance monthly. If you're a student and you need some more tips on student loans, and help considering your loan options, check out StaffordLoan.com and PrivateStudentLoans.com to learn more about the different types of loans available to students.
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