loan calculators accurate?

[Faux]

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Correct me if I'm wrong but for those that are borrowing, you need to borrow for each year and during that year, interest starts charging and then the cycle repeats for the 2nd year and so on. Right?


Most calculators just ask you for the amount of debt and the number of years of preferred repayment. Does anyone use anything different?


Also, its to my understanding that grad students can no longer get subsidized loans. I never took advantage of these during my undergrad, is there no way i can access that now?

 

[Mad Jack]

Interest doesn't compound until your fourth year. Grad students do not get subsidized loans, so interest accrues but does not compound during school.

 

[Faux]

Interest doesn't compound until your fourth year. Grad students do not get subsidized loans, so interest accrues but does not compound during school.

Thats what I'm saying. Do these calculators take into account that interest is occurring while you're in school?

 

[Kef318]

Please someone correct me if I'm wrong, but it is my understanding that the interest each year gets capitalized after the end of the 4 years. That means that if you borrow 50K each year at 7%, year 2 becomes 100K (50 plus 50) at 7%, year 3 becomes 150K at 7% and year 4 is 200K at 7%. Since you're basically looking at 4 separate loans for each year, the interest is not compounded (capitalized) until the end of the 4 years. You want to avoid the interest being capitalized. Even though no payment is required while you are in school, I am hoping to pay the interest each month so that I can avoid the interest compounding. I am fortunate in that I will have a spouse who can help with those expenses.

 

[Faux]

Please someone correct me if I'm wrong, but it is my understanding that the interest each year gets capitalized after the end of the 4 years. That means that if you borrow 50K each year at 7%, year 2 becomes 100K (50 plus 50) at 7%, year 3 becomes 150K at 7% and year 4 is 200K at 7%. Since you're basically looking at 4 separate loans for each year, the interest is not compounded (capitalized) until the end of the 4 years. You want to avoid the interest being capitalized. Even though no payment is required while you are in school, I am hoping to pay the interest each month so that I can avoid the interest compounding. I am fortunate in that I will have a spouse who can help with those expenses.

is there an online calculator that takes this into account?

 

[Daneosaurus]

Please someone correct me if I'm wrong, but it is my understanding that the interest each year gets capitalized after the end of the 4 years. That means that if you borrow 50K each year at 7%, year 2 becomes 100K (50 plus 50) at 7%, year 3 becomes 150K at 7% and year 4 is 200K at 7%. Since you're basically looking at 4 separate loans for each year, the interest is not compounded (capitalized) until the end of the 4 years. You want to avoid the interest being capitalized. Even though no payment is required while you are in school, I am hoping to pay the interest each month so that I can avoid the interest compounding. I am fortunate in that I will have a spouse who can help with those expenses.

Slightly off topic, but what does your spouse do (and if you would rather, PM me)? We are relocating and my wife is concerned about the job market in her field (she's a sociology/criminal justice double major, will graduate at the same time as me) in the area.

 

[Ferneezy]

is there an online calculator that takes this into account?

try this: http://www.finaid.org/calculators/interestcap.phtml

cap frequency will be at repayment. for D1 loans choose 48 month deferment, D2 loans get deferred 36 months, etc.

it's probably not the most accurate way, but it's reasonably close...and eye opening.

edit: to clarify, yes, you're essentially looking at four separate borrowing instances each with their own "interest clocks" as you progress through your education. that said, the early loans will hit you harder than your later loans. keep them as low as possible.

 

[Kef318]

Daneosaurus - He is an electrical/computer engineer.

 

[Daneosaurus]

Daneosaurus - He is an electrical/computer engineer.

That's fairly employable!