A student loan is a loan borrowed for higher education by the students or parents. Usually, a student loan is used to pay the tuition fee, room, and board, and can also be used for living expenses and books. Work-study programs are available for students who need money and are able to work part-time. Students with extra disposable income can easily pay education cost before taking out the student loan that will be helpful for the student to reduce the length and size of the student loan.
Types of student loans:
Federal student loan:
- Direct subsidized loan: It is based on financial needs.
- Direct unsubsidized loan: It is not based on the financial needs.
- Direct PLUS loans: They are credit-based and unsubsidized.
Private student loan:
- Private student loan: The student takes this loan and parents or other individuals need to cosign the loan.
- Parent loan: It is taken by the parents or other individuals to help the student to pay for college.
Student loan repayment:
In the student loan repayment, the borrowers are allowed to lower payment amount, postponed payment, and loan forgiveness in some cases. This repayment flexibility is provided to the borrower whose life changes. It is especially helpful for the borrower with a health crisis or a financial crisis. The other repayment options are standard payments, extended and graduated payment plans and income-driven plans.
The components included in the student loan calculator:
Simple student loan calculator:
- Loan balance: The loan balance available.
- Remaining term: The time remaining for pay off the student loan.
- Interest rate: The interest rate paid on the loan.
- Monthly payments: The monthly payments made towards the student loan.
Student loan repayment calculator:
- Repayment option: pay off altogether, repayment with extra payment, normal payment.
Student loan projection calculator:
- To graduate in: number of years of graduation.
- Estimated loan amount: The estimated loan amount that has to pay for the student loan.
- Current balance: The current balance of student loan.
- Grace period: The grace period for paying off the student loan.
- Do the borrower wants to pay interest during the academic year.
Using the student loan calculator the user can estimate the loan balance and repayment obligation after graduation. It is mainly used for the student who is still in the college or graduations haven’t started.