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I was wondering how much we will owe due to interest alone (if we borrow $120G) and how long it takes to pay off all our loans if that's all we are doing after we graduate?
How much do we owe in interest when we graduate?
- Thread starter krsnyf
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I was wondering how much we will owe due to interest alone (if we borrow $120G) and how long it takes to pay off all our loans if that's all we are doing after we graduate?
That would depend on the loan you take out. If it is a government loan with a low interest rate (5 percent), you can expect to pay what DrugDoc is paying. If it is a private loan, you will be paying a lot more. Other factors that you have to take account into besides the interest rate is if it is a variable rate or not? (Some rate can increase based on market and fed rate), and if there an early repayment fee (if you can pay off your loans early, you dont have to pay as much interest, some loans are fixed and you cannot pay off the loan early without heavy fees).
That would depend on the loan you take out. If it is a government loan with a low interest rate (5 percent), you can expect to pay what DrugDoc is paying. If it is a private loan, you will be paying a lot more. Other factors that you have to take account into besides the interest rate is if it is a variable rate or not? (Some rate can increase based on market and fed rate), and if there an early repayment fee (if you can pay off your loans early, you dont have to pay as much interest, some loans are fixed and you cannot pay off the loan early without heavy fees).
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Just pay your loans off ASAP, or you could transfer the loan amounts to a brand new credit card if they offer you a very loan interest rate. I'm not an expert on debt transfers, so do your homework.
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I saw your post and wanted to try and help. Student loans can be
confusing!
There are federal student loans (staffords, perkins, etc.) and then there are private loans.
The interest rates on federal loans have a cap - they can go no
higher than 8.25%. Private loans have no cap and are based on credit
score.
You should not consolidate your federal student loans in with a private
loan. That includes transferring to credit cards, etc. When you do this,
your loan becomes a private loan and you lose all your federal rights
(deferment and Forbearance) and the loan is not longer backed by the government. There are also no pre-payment penalties with federal loans, most private loans have pre-payment penalties.
It makes sense to carry the low federal interest rate federal debt and pay
off your higher interest rate credit cards, car loans, etc.
When you come out of school, you're automatically set to a 10 year
repayment schedule on your federal loans. You can cut your payments
(usually in half) if you consolidate. This combines all of your loans into one, and allows you to stretch out the payment term.
Now you've cut your payments in half which helps with cash flow, but
how do you actually save money on the loans? Federal loan rates
are mandated by the govt. Every company that participates in the federal
loan program offers you that same rate. Look for interest rate reduction programs! Depending on your balance (usually the higher the balance, the more aggressive the reduction) - Some companies offer you interest rate reduction programs. You can save percentages off your interest rate for consecutive on time payments and automatic debit payments. A 1.25% interest rate reduction may not sound like much - but when you do the math, it can save you THOUSANDS and take YEARS off your loan.
Here's an estimate/example:
***************************************************************
Balance: $89,267.00
Weighted Average Interest Rate: 4.25%
On-time Payment Incentive (received after 24 mos of on time
payments): 1.00% reduction
Auto Debit Incentive (effective immediately) .25% reduction
Interest Rate AFTER REDUCTIONS: 3.0%
Standard Payment: $439.14
Initial Graduated Payment: $320.00
Graduated Payment (after 10 years): $549.91
Estimated Interest (without incentives): $68,823.39
Estimated Interest (with incentives): $39,038.95
Your Savings (because of incentives): $29,784.45
Time Savings (based on 30 year note): 5 years, 6 months of payments off of your loan!
***************************************************************
Sorry for the long post - but the company I work with helps medical students to get their loans consolidated and I just like to try and clear up the confusion with student loans anytime I see it. (we were just at the Florida Pharmacy Association conference) Check out the calculator on our website if you want to run your own balances: www.medicalschooldebtsolutions.com and Feel free to email me if you have any more questions! Best! Tammy
confusing!
There are federal student loans (staffords, perkins, etc.) and then there are private loans.
The interest rates on federal loans have a cap - they can go no
higher than 8.25%. Private loans have no cap and are based on credit
score.
You should not consolidate your federal student loans in with a private
loan. That includes transferring to credit cards, etc. When you do this,
your loan becomes a private loan and you lose all your federal rights
(deferment and Forbearance) and the loan is not longer backed by the government. There are also no pre-payment penalties with federal loans, most private loans have pre-payment penalties.
It makes sense to carry the low federal interest rate federal debt and pay
off your higher interest rate credit cards, car loans, etc.
When you come out of school, you're automatically set to a 10 year
repayment schedule on your federal loans. You can cut your payments
(usually in half) if you consolidate. This combines all of your loans into one, and allows you to stretch out the payment term.
Now you've cut your payments in half which helps with cash flow, but
how do you actually save money on the loans? Federal loan rates
are mandated by the govt. Every company that participates in the federal
loan program offers you that same rate. Look for interest rate reduction programs! Depending on your balance (usually the higher the balance, the more aggressive the reduction) - Some companies offer you interest rate reduction programs. You can save percentages off your interest rate for consecutive on time payments and automatic debit payments. A 1.25% interest rate reduction may not sound like much - but when you do the math, it can save you THOUSANDS and take YEARS off your loan.
Here's an estimate/example:
***************************************************************
Balance: $89,267.00
Weighted Average Interest Rate: 4.25%
On-time Payment Incentive (received after 24 mos of on time
payments): 1.00% reduction
Auto Debit Incentive (effective immediately) .25% reduction
Interest Rate AFTER REDUCTIONS: 3.0%
Standard Payment: $439.14
Initial Graduated Payment: $320.00
Graduated Payment (after 10 years): $549.91
Estimated Interest (without incentives): $68,823.39
Estimated Interest (with incentives): $39,038.95
Your Savings (because of incentives): $29,784.45
Time Savings (based on 30 year note): 5 years, 6 months of payments off of your loan!
***************************************************************
Sorry for the long post - but the company I work with helps medical students to get their loans consolidated and I just like to try and clear up the confusion with student loans anytime I see it. (we were just at the Florida Pharmacy Association conference) Check out the calculator on our website if you want to run your own balances: www.medicalschooldebtsolutions.com and Feel free to email me if you have any more questions! Best! Tammy
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