Student loan calculator – Comprehending the benefits and the variables needed to use it
By Sidney Terrell
The currentt recession that we’re going through has taken a toll on the life of many Americans… and students are perhaps the worst hit. We need a college education to shine in life (See: The Difference a Degree Makes in Unemployment Levels) but with the present rise in college education costs, most of us can’t afford to pay for college with our own funds. Often we take out student loans or borrow from family members in order to fulfill your dreams of attaining sufficient education.  Presently the tuition fees are so high in the United States that the majority of students graduate with their degree and a considerable amount of debt. (See: Sky Rocketing College Costs )
However taking out too many student loans can make you drown in the cycle of high interest debt.
There are a variety of financial calculators that can ease the stress of making manual calculations, you can use the student loan payment calculator in order to make calculations easier.
Using a student loan repayment calculator
With a student loan repayment calculator, such as the one from FinAid, you can figure out exactly how much money you owe on your loans and the exact time that you may take in order to pay back the money. If you’re a potential student who wants to figure out the exact amount that you need to pay and the time within which you can become debt free, you may use this calculator.
The interest rates on your student loan – Why are they important?
If you want the student loan repayment calculator to compute the amount of the monthly payments that you have to make and the time within which you can get out of debt, you need to know the interest rates that you’re paying on the loans. Usually a general student loan repayment calculator uses a flat 6.8% on the student loans but most of them will even give you the chance to change the value of the rate. The reason behind this flat rate is that most of the student loans disbursed after July, 2006 carries this rate but if you own a subsidized undergraduate loan, the interest rate may be different. If you’re presently looking forward to go back to school, ensure that you use the exact interest rate so that you may get the best results.
Knowing whether paying extra can benefit you through a calculator
If you can come up with a bit of free cash at the end of the month it may make sense to try to pay off your student loan early since all student loans allow for prepayment without penalty.  The key is to know how much it will save you in the long run.
Well, this is possible by making some quick and smart calculations with the student loan repayment calculator. With a small amount of additional money every month, you may be able to shorten the term of the loan and thereby save money on the accumulated interest rates. You can make the required adjustments to the figures and check how much money you can save by making some extra payments every month.
On the other hand, if you’re in student loan debt and you’re also going through a credit crunch, it’s natural that you may want to lower your monthly payments in order to alleviate the financial stress that you’re going through. You may be able to extend the term of your loan (thus paying less each month) but it will also increase the total amount of interest you pay.  Once again, using a student loan calculator can help you decide how you can restructure your payments to best suit your current circumstances.
You might also be interested in: Mounting Debt and Lower Salaries – A Persisting Trend for Grads
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About the Author:
Sidney Terrell is an associate writer with Oak View Law Group. Her expertise includes finance and investment. She has written several articles on debt settlement, bankruptcy, bill consolidation and mortgage since 2005.
