Education loan interest calculator

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Education Loan Interest Calculator
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Take 4 Steps to Understand Student Loan Interest
Rates
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• Megan Murray graduated from the University of
  Central Oklahoma in 2005 with a relatively
  reasonable 13,000 in undergraduate loan debt.
• But after spending several years teaching in
  China and deferring her loan payments she
  came home to find that her high-interest private
  loans had swelled to around 30,000.
• "I didn't know that the second I'd cashed that
  check, interest started accruing," says Murray.
• Murray buckled down, moved back in with her
  parents and managed to pay off her debt within
  several years.
• And while her experience is extreme, the fact is
  that interest is a major and often overlooked
  cost of borrowing student loans.
• Even ignoring interest while in school can cause
  it to escalate, says Scott Morrison, director of
  financial aid at Bridgewater College in Virginia.

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Learn the interest on federal loans 

• Interest on federal student loans varies
  depending on several factors, including the type
  of loan, year it was borrowed and whether the
  borrower is an undergraduate or graduate student.
• year, subsidized loans, which have interest
  covered in school, and unsubsidized loans, which
  don't, carried a 4.66 percent interest rate.
• For graduate students in 2014-2015, unsubsidized
  loans carried a 6.21 percent rate higher than
  the rate for undergraduates. PLUS loans,
  available to graduate students and parents for up
  to the full cost of attendance minus any other
  aid, charged 7.21 percent.
• Those rates are fixed over the life of the loan,
  meaning that once they're disbursed, they won't
  change. But the 2015-2016 school year will bring
  fresh market-based rates for new loans.

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Investigate interest on private loans

• Credit scores matter in the private loan
  industry, so families with strong financial
  histories can expect better rates while those
  with less-than-stellar credit reports may need to
  borrow at a higher rate or find a consigner.
• Interest may also depend on the repayment terms,
  whether the student signs up for automatic debits
  which also net borrowers an interest rate
  reduction on federal loans and other factors.
• Students often have the option between a
  variable-rate loan, which adjusts at regular
  intervals with the market, and a fixed-rate loan.
• While variable rates are lower right now,
  borrowers should be cautious when committing to
  one since they can rise over the life of the
  loan.

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Beware of capitalization

• On many student loans, education loan interest
  calculator including many federal loans, any
  interest that accumulates during school and
  deferment is capitalized and added to the
  original balance of the loan. This can create a
  snowball effect, causing the amount owed to
  increase, with students paying interest on
  interest, and repaying more debt.
• Students can tamp down that interest and
  prevent it from capitalizing by
  making interest-only payments while in school.
• Being mindful of what they've borrowed and using
  a repayment calculator will also help students
  avoid sticker shock after graduation, says Joe
  DePaul, CEO and co-founder of College Ave Student
  Loans, a private student loan provider.

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Compare more than just interest

• Interest isn't the only factor to compare when
  weighing the costs of various loans, say experts.
• "It's important to look at all the features of a
  loan, not just the interest rate," says Yoia, of
  Quinnipiac University.
• Look at repayment options, including forbearance
  or deferment, death or disability discharges and
  options for forgiveness or income-based
  repayment. Federal loans offer better protections
  than private loans in many cases.
• And remember, says DePaul, that, in addition to
  interest, the overall cost of a loan also depends
  on whether the student tackled it in school and
  how much time it takes to repay it.

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