• Student Loan Calculator

    How to use Student Loan Calculator

    Also known as the student loan repayment calculator, this online calculator is available for the benefit of knowing an individual’s capacity for loan repayment and also being able to comfortably pay it. This is an essential tool for students who need to take a loan to finance their education, whether in India or abroad. However, based on fee structure, scholarship and various other factors the loans vary in terms of interest on the loan amount as well as the repayment structure. With so many variables to deal with, a student loan calculator that can be accessed online is very useful.

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    How does the Student Loan Calculator work

    As student loan calculator functions similar to any other loan calculator with similar variables. This includes principal amount, term of repayment and the most important is the loan repayment interest rate that is being offered by the bank. A loan payment calculator basically computes the estimate of the amount of a student’s monthly loan payments and some even can compute the annual salary required to manage them without having too much trouble for loan repayment. Here are some variations in loan calculators that you have to keep in mind when using a student loan calculator:

    1. Some loan calculators are based on the country you are applying for. There are designated loan calculators that can be used with Federal education loans (Stafford, Perkins and PLUS) and other private student loans if you are applying in the US. Also, the currency will be different and keeping in mind that the inflation rate in US$ and exchange rates with Indian currency it might be a little too overwhelming. So, the estimate provided in such instances should be considered taking 10% of the amount for inflation in the loan repayment period.
    2. Some loan calculators assume considering that the interest rate would be constant throughout the loan repayment term. Some foreign loans often have a fixed interest rate of 6.8% to 8%. Some even have the interest rate of 5%. But they may be fixed. In the case of Indian student loans things might be different as banks may offer flexibility in loan repayment term and interest rate. For example a longer term of repayment may have lower interest rate and a smaller term for repayment have higher interest rate. Some Indian banks allow waivers, riders and other flexibilities on student loan in association with a particular educational institution, university or college.
    3. Some loan calculators may assume that the loan will be repaid in equal monthly installments through standard loan amortization which again may change based on where you are applying the loan.
    4. Often, loan fees are made to adjust the initial loan balance so that the student nets the same amount after the fees are deducted.
    5. Some educational loans may also have a minimum monthly payment. Hence, the minimum payment field has to be filled as well. You would need to enter a higher figure to see how much money the student can save by paying off your debt faster. It will also display how long it will take to pay off the loan with a higher monthly payment.
    6. Some loan calculators ask you questions concerning enrolment status, degree program and total years in college which are optional and are designed to evaluate whether the total debt is excessive. The total years in college should include the total number of years in college so far (or projected) corresponding to the loan balance, including previous degrees received.

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