If you’re a student, chances are that you have to take out loans. This is because college education is becoming more expensive with each passing year. In fact, the cost of tuition has risen by 3% every year on average since 1990 (Source: The College Board). However, there are ways to make sure that your loan doesn’t overwhelm you with debt after graduation—even if it means cutting back on some luxuries during your time as an undergrad!
Learning How Student Loans Work Can Be Difficult
Student loans are confusing. The Federal Reserve Bank of New York found that 66% of millennials say they don’t understand their student loan obligations and the repayment options available to them. Using a student loan calculator, you can keep a check on your loan. SoFi professionals say, “This calculator shows how much you have to pay each month.”
It’s important to understand how these loans work so you can get started on getting rid of your debt. James O’Leary suggests using calculators to help you calculate student loan payments and even what kind of job might pay off your debt reasonably. He also recommends talking with a financial aid advisor if you need more personal guidance for managing your student loans.
Start With the Basics
Student loans are a type of financial aid that students receive to help pay for their education. The money can be used toward tuition, textbooks, room, and board (or rent), transportation costs, and other expenses related to attending college or university. In exchange for receiving this money, students will usually have to sign an agreement promising to pay back the loan with interest after they graduate.
If you’re planning on going back to school soon, or if you’re already in college and need some extra funding for your studies, then learning more about student loans could be beneficial. Here’s a breakdown of how they work:
Ask the Right Questions
In order to calculate a student loan, you need to know what you can afford. Ask the right questions.
- What are your interest rates and fees?
- How long is your grace period?
- What are your repayment options?
There are many benefits of asking these questions regarding student loans. First, you’ll be able to see how much money you’re spending on your loans every month and how much debt you have remaining in the future.
Related: Private Vs. Federal Student Loans
Understand Your Options
Understanding your options is the first step in calculating a student loan. The options available to you will depend on your circumstances and are dependent on how much money you need, how much time you have left, and if your employer offers benefits such as tuition reimbursement or a matching contribution. If the answer is yes, look into these programs before looking at private loans.
Calculating Your Payments is Easy When You Know What Options Are Available to You
While determining the payment amount can seem confusing, it’s actually quite simple. The first step is to understand the different types of student loans and your options. You can use a calculator to help you calculate your payments by entering in some basic information, such as:
- Loan amount
- Interest rate (flat or variable)
- Term length (in years)
Once you enter this information into the calculator, it will show how much each monthly payment would be for each loan type.
You can contact your lender or loan provider as soon as possible. They will have the correct details and information to help you decide what’s best for you.
