Monthly Payments Student Loans

You’re about to enter your monthly payments for student loans!

If you want to know how much you would have paid per month if you had never borrowed money, just multiply the number below by 12 (months).

So, if your loan was $10,000, you’d pay $120 per month. If it were $20,000, you’d owe $240 each month.

How much do you think you’d have paid in total?

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Monthly Payments Student Loans

Student Loans

Student loans are a type of loan, or debt, that students take out in order to pay for their education at school. These loans vary in amount based on how much money the student borrows, the interest rate charged on them, and the length of time they have left to repay them.

Monthly Payments

The monthly payments on any given student loan consist of two parts: principal and interest. Principal refers to the original amount borrowed, while interest refers to the amount owed each month after the initial payment. If you don’t want to rack up additional debt, then making regular payments on your student loans will allow you to reduce the total amount you owe.

Interest Rates

Interest rates are expressed as percentages. For example, if you borrowed $10,000 at an 8% interest rate for 10 years, then the interest would equal 80%. Most federal student loans carry a fixed interest rate for the entire duration of the loan, although some private lenders may offer variable interest rates. The higher the interest rate on a student loan, the more your monthly payments will increase over time; however, having a lower interest rate means that you will make fewer monthly payments.

Paying Off Your Loan Early

You might not think paying off your student loans early makes sense, considering you’ll still have 20-25 years remaining on your repayment period. But in many cases, paying back your loans early can result in substantial savings. Depending on the interest rate on your loans, you could save thousands of dollars in interest charges. In addition, paying back your student loans early will keep your credit score high.

Make Sure You’re Repaying Your Debt Properly

If you stop making payments before the end of the agreed upon repayment plan, you could find yourself facing penalties and fees that could add up to hundreds of extra dollars per year. Be sure to review your account terms and repayment schedule carefully. If you need help managing your finances, consider using a personal finance management app.

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Monthly Payments Student Loans

The student loan debt crisis has been steadily rising over the past decade. As of 2015, private student loans held $853 billion in outstanding balances, accounting for 52% of all consumer credit market debt. In fact, student loans are now bigger than credit cards!

With the average monthly payment for a private student loan at $429, many feel they have no choice but to take out loans to pay for their education. However, students should not continue taking out these types of loans if they plan on paying them off early.

It might seem easier to just keep racking up those loans, but the truth is that there are plenty of options for college graduates who wish to avoid getting saddled with debt later in life. Here’s what you need to know about different student loan repayment plans.

Deferment

A deferment is a temporary suspension of payments, where the borrower temporarily stops making payments. Deferments are granted in some cases, such as when borrowers are enrolled in school, are unemployed, or are in the military. Students may apply for a deferment at any time, even after borrowing money. If you’re accepted into a job while going back to school, you could get an automatic two-month extension on your loans.

Payment Suspension

If you haven’t already heard, federal law requires lenders to suspend loan repayment for anyone whose unemployment lasts longer than 12 months. Those who have been out of work for less time don’t qualify. Even though you still owe interest, you won’t have to make a single dime toward your monthly bill until you find a steady job again.

Graduated Repayment Plan (GAP)

This program is designed to help graduate students who want to start earning income right away. Under this option, you’ll repay your loans with minimum monthly payments. After three years, however, you’ll begin making larger payments towards the principal. This way, you won’t have as much money left over to spend on necessities once you’ve paid off your student loans completely. You’ll only have to make small, regular payments for 10 years instead of 20, 30, 40, etc.

Direct Loan Consolidation

Another option for students who want to consolidate debt is direct consolidation. To do this, you’d speak to a lender directly, rather than going through a third party to negotiate a lower rate. By consolidating your loans, you’ll save money on interest costs. Direct consolidation is ideal for people who have several loans issued by different companies. If you have private student loans and auto loans, for example, you can combine them into a single loan under the same company.

Paying Off Debt Early

While deferred payments are great for saving money over the long run, they can actually hurt you financially in the short term. Interest charges accrue while the loan is unpaid. When you eventually start making payments, interest is added to your account. The sooner you pay off your loan, the fewer interest charges you’ll incur.

There are ways around this problem, though. One of the easiest is to refinance your student loan debt. Refinancing means changing the terms of your existing loan, including how often you have to make payments and how much you’ll pay each month. There’s no requirement that you fully pay off your current loan before refinancing, since the goal is to lower your total balance.

Monthly Payments Student Loans

Mortgage Interest Rates – Current

Current Mortgage rates for home loans (30-year fixed rate)

Current interest rates as of January 9, 2019

Interest Rate Type

Adjustable (APR): 5.375%

Fixed (Fees): 2.625%

15 Year Fixed (Fees): 2%

20 Year Fixed (Fees) : 2.25%

30 Year Fixed (Fees: 2.875%)

Loan Term

One year $10,000 loan at 1.125% APR

60 Month $100,000 Loan at 4.0% APR

120 Month $250,000 Loan at 3.25% APR

180 Month $300,000 Loan at 2.5% APR

Monthly Payments Student Loans

0-9 Months : $0.00

10-29 Months : $0.05

30+ Months : $0.04

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