Using A Federal Student Loan Calculator
A student loan calculator can make life easy for you – simply enter the loan amount and the interest rate to get the monthly payment amount you need to repay. This is important for you to understand how a federal or a private loan will affect your monthly earnings once you graduate. Doing this will also help you in determining what loans will be easy to pay off and which loans to avoid taking.
Why Take a Loan
College can be expensive which makes it difficult to pay for it. Sure, scholarships help you pay tuition costs but it is advisable to have a backup plan if you get a partial scholarship or if you do not get a scholarship at all. Post recession, most employers want to hire students with some sort of college experience so college education has become more important than ever.
When you decide to take a loan, a student loan calculator can be a very useful tool in calculating monthly payments and helping you decide what loan amount you can take without burning a hole in your pocket.
Getting a Loan
If you are a high school student or even a freshman, you will be surprised by the amount of emails you get about student loans. It is not difficult to get a student loan. In fact, if you are an academic overachiever, getting a loan will be a breeze. When reading student loan emails, do not forget to read the fine print.
Many private loan companies have high interest rates, making it difficult to pay back. In such a case, it is best to opt for federal student loans such as direct loans and grants. They are designed to be student friendly and have multiple options for loan repayment.
How to Use a Student Loan Calculator
A student loan calculator is a nifty application that calculates monthly payments for you. Use it wisely. Let’s say you have opted for an income based loan. By using the student loan calculator to determine payments, you can balance it against your expected monthly salary. This helps in advance preparation and also helps you make critical financial decisions such as part time work during college or reducing the loan amount for easy repayments.
Here’s how you can use a student loan calculator – enter the amount of loan you want or have taken, your birth date and year of graduation, expected earnings once you graduate, and expected earnings after five years of work.
If you have trouble working out your expected earnings, you can see the Occupational Outlook Handbook of the Bureau of Labor Statistics for your planned career.
Remember that the actual amount you end up earning after graduation may be more or less depending on the economic situation but the student loan calculator will help you in getting an estimate of what you need to repay.
Student Loan Calculators and Debt Consolidation
Freshmen and sophomore students are bombarded by emails about debt consolidation. Sometimes it can be difficult to get a loan amount that covers you entire tuition costs so many students take two or three loans from different lenders. Using debt consolidation combines all your loans as one making them easier to manage.
Some advanced student loan calculators take into account debt consolidation and calculate repayments based on any extra charges that you incur for this service.
Federal Websites Are Your Best Friends
Instead of hopping from one source of information to another, look for .gov or .org websites. These will provide you with accurate information about loans. The Department of Education’s Federal Student Aid website has different student loan calculators depending on the kind of loan you want to apply for.