Hello! I recently just started a fellowship and after doing my deferment paperwork was wondering if anyone more savvy could help me figure out a few things regarding my loans. I currently have about 150,000 in federal loans with an avg interest rate of about 5.8%. While I am deferring these loans for two years I will accrue about $17,000 more in debt. Can someone help me figure out how much I could prevent accruing if I pay like 200 bucks a month or so to try to keep the interest down? Is doing something like that even going to make a dent? I make about 45,000 during the fellowship so I don't have too much to work with every month, but would like to do something. Thanks in advance for your help.
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Unfortunately $200 doesn't cover all of the interest, so it will just reduce it by $200 x 24 mo = $4,800, and you will still accrue around $12k.
You estimate the interest like this:
$150,000 x 0.058 = $8,700/yr or $725/mo in interest.
So you would have to pay at least $725/mo to prevent the interest from accruing, and before you can even start paying down the principal balance.
You estimate the interest like this:
$150,000 x 0.058 = $8,700/yr or $725/mo in interest.
So you would have to pay at least $725/mo to prevent the interest from accruing, and before you can even start paying down the principal balance.
Just a tip, you can pay off your loans by group. If you have one loan with a mid to low 6% interest, you could focus on that one and wait on the loans with mid to low 5% interest rates. It probably won't make a huge difference, but every little bit helps.
For people not deferring loans, keep an eye on due dates for individual loans if you plan to do this.
For people not deferring loans, keep an eye on due dates for individual loans if you plan to do this.
Look into repaye, it will pay off 50% of your unpaid interest and 100% of the subsidized loans interest (may have received in undergrad but no longer available to grad students due to Obamacare). Also your interest doesn't capitalize until you switch payment methods.