Student loan calculator – One Way to Achieve Your College Dreams
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| One Way to Achieve Your College Dreams |
A loan is a serious kind of financial undertaking and requires the student’s seriousness and commitments. Whether you are lending from a private lender or from the federal government, you must be committed and be careful too, and being a student, you will need a student loan calculator.
When it’s time to think about going to college, a whole lot of things will surround the mind of the student. They will weigh out their decisions on a scale to see which one gains more priority and which one can be handled effectively. Of everything that dominates their thoughts, at this point, financial capacity stands to be the most important. They will consider all forms of financial aid including scholarships and grants even though having a scholarship does not mean your entire educational needs will be completely taken care of. Student loan has been a good escape route for people who for one reason or the other is unable to cater for their college needs and the availability of student loan calculators has made it all the better and easier for students to calculate and speculate their payments.
While achieving your college dream is the paramount thing on your mind, you must however learn how to make the most of the loan, while the problem may not be borrowing; the major problem may come from paying. This is the major concern of many people and why they are scared to take loans. With a student loan calculator, and the adoption of a good payment plan, one can easily take off the burden of repaying back loans.
Here are some student loan repayments plans that you may need to know, but before then it might interest you to know that when the time comes to start repaying your student loan(s), you can select a repayment plan that is right for your financial situation. Generally, you’ll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose.
- Standard Repayment – with this plan you will only have to pay a fixed amount at the end of the month until your loans are paid in full. Your monthly payments will be fixed and when your total loan is divided with it, you will know how long it will take for you to finish paying up your entire loan. Under the standard plan, your monthly payment may be higher than it would be if you were using other plans because your loans will be repaid in the shortest time. For that reason, if you are having a 10-year limit on repayment, you may pay the least interest.
- Extended Repayment – this actually can be a good plan if you want to make smaller monthly payments, because the repayment period will be 25 years, making your monthly payments less than with the standard plan. You must however bear in mind that, while using an extended repayment plan, you may pay more in interest. This is because you are taking longer to repay your loans – take note that the longer your loans are in repayment, the more interest you will pay. In the extended plan, you will pay a fixed annual or graduated repayment amount over a period, usually not exceeding 25 years.
- Graduated Payments – the deal in this plan allows you to start with low payments, after which payments will increase after 2 years. The length of your repayment period will be up to 10 years. Here is a tip for you, if you are positive that your income will increase steadily, then this might be the right plan for you. Bear in mind that your monthly payment will never be less than the amount of interest that accrues between your payments.
- Income Based Repayment (IBR) – this is a new repayment plan for the major types of federal loans made to students. Under the income based repayment plan, the payment that is required monthly is capped at an amount that hoped to be affordable based on the person’s family size and income. You are eligible for income based repayment plan if the monthly repayment amount under the income based repayment plan will be less than the monthly amount calculated under a 10-year standard repayment plan. The good thing is that if you repay under the income based repayment plan for 25 years and meet other requirements you may have any remaining balance of your loan cancelled. In addition, if you work in the public service and you have reduced loan payments through the income based repayment plan, the remaining balance after a period of 10 years in a public service job may be cancelled. However, you are advised to make more enquiries about this type of student loan repayment plan.
On accepting your student loans, I am sure that you agreed to the terms of repayment with the expectation that you would be gainfully employed after your university studies and equipped to submit payments. For this reason, you will need a student loan calculator all the more.
