Student Loan Repayment Calculator

By: EconomyWatch Content   Date: 24 November 2009

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Education student loans have more or less become an imperative, considering the rising cost of education. In fact, even scholarship or grant holders may find college education very expensive, having to ultimately resort to education loans. Applying for an education loan has become fairly easy. Considering the growing number of lenders in the market, the intricacy lies in managing repayments on such loans. A student loan repayment calculator is an excellent planning tool for students, enabling to establish monthly repayments on single and multiple student loans accurately.

Student Loan Repayment Calculator: Features

Student loan repayment calculators compute an estimation of the size of the monthly loan payments. Such calculators can be used with most federal and private education loans. Typically, a student loan calculator delivers results on the basis of the following basic inputs:

                     

·        Principal loan balance: Amount due at the time of making the computation. 

·        Rate of interest: This varies from loan to loan, except in case of a consolidated education loan, where a single rate is determined for calculation. Also, a student loan calculator takes an interest rate by default for common federal loans, such as Perkins Loan and Federal Stafford Loan.  

·        Tenure or life of the loan: Number of remaining years at the time of computation.

·        Fees applicable, if any: This feature may not be available on certain calculators, and have to be adjusted separately.

In addition, some calculators provide for adjusting minimum monthly student loan payments.

Student Loan Repayment Calculator: Evaluating and Employing Results

A student loan repayment calculator can be utilized for either:

  • Determining the estimated monthly payments required to clear the entire debt in a specified period, without any default.

  • Establishing the duration of the loan(s), considering a fixed monthly payment.

Besides, these calculators can also be used to determine the estimated monthly income required to meet the debt obligations comfortably. Typically, repayments towards student loans are calculated at 10% of the monthly income.  

A student loan repayment calculator can also enable a borrower to plan for faster debt elimination. By altering interest rates and minimum repayments on the calculator, one can review different repayment schedule alternatives and select the most feasible plan.


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