Early Payoff Student Loan Calculator
If you’re a student loan borrower, you probably know that paying off your debt as early as possible can save you money in the long run. But how do you know if it’s worth it to make an extra payment each month? Our simple calculator will help you determine whether that payment is worth doing.
Enter the current balance of your student loan.
If you already have a student loan, the next step is to enter the current balance of your student loan. This is important, because it will show you how much more money you need to pay off before your debt is paid off completely. Be sure to include any fees and interest that have accrued since taking out the loan!
Enter the current interest rate of your student loan.
Enter the current interest rate of your student loan. Interest rates vary depending on the loan type and can range from 0% to as high as 16%. You can find this information by checking with your lender or looking at the terms of your promissory note (the contract for your student loans).
First, you need to know what type of student loan you have:
Federal loans: This includes the William D. Ford Federal Direct Loan Program and Perkins Loans, which are both federal programs that provide funding for education costs through direct lending institutions like banks, credit unions, colleges and universities. Federal loans typically have lower interest rates than private ones (which we talk about below), but they also come with a lot more strings attached—for example, if you leave school mid-semester without finishing your degree program then all remaining debt on those federal loans will be forgiven after six months of being out of school. Private loans: These are obtained from private lenders such as banks or other financial institutions that require borrowers to pay back their principal plus any accrued interest in monthly installments over a set period (like 10 years). Variable rate versus fixed rate: If an organization offers multiple types of consumer products—such as mortgages with different interest rates—then these products will usually fall into two categories: fixed-rate vs variable-rate mortgages; variable-rate vs fixed-rate credit cards; etcetera…
Enter the minimum monthly repayment amount.
Enter the minimum monthly repayment amount. This is the most you’re required to pay each month, even if it doesn’t cover the interest that has accrued on your loan. If you make only minimum monthly payments, you’ll pay more in interest over time and take longer to repay your student loans. The minimum monthly repayment amount varies depending on several factors:
- The type of loan (e.g., credit card or student)
- Your credit score
- Whether there are any co-signers (i.e., other people who took out the loan with you)
The total amount you will have repaid to date is .
This is the total amount you will have repaid to date. The $30,000 tuition payment you made over 12 months adds up to $2,083.33 per month, which is your average monthly payment and multiplied by 12 months equals the annualized cost of college tuition; thus, at the end of each year, your loan balance has decreased by about $23,000 (the original $30K minus what you paid back). Your average monthly payment has been reduced from its initial level by interest accrual from prior years’ payments (which are now being made as prepayments). That can be seen in the fact that although you only paid off about 80% of your balance for this current year ($26K), only 20% ($5K) remains outstanding since your older payments were added into this year’s loan balance when making them as prepayments.
You can save . by paying off your student loan early.
The sooner you pay off your student loans, the more money you will save over the life of your loan.
- You’ll pay less in interest
- You’ll have access to that money for other investments or savings goals
The Early Payoff Student Loan Calculator can help you determine how much money you could save by paying extra toward your student loans each month. Enter some basic information about your student loans and the Early Payoff Student Loan Calculator will show how much faster they would be paid off with an additional monthly payment.
You can save money by paying off your loans early
By paying off your student loans early, you can save money in two ways. First, by paying down the balance on your loans, you will be able to reduce the amount of interest that would have accrued if you had left the balance untouched. Second, by using those funds to invest in stocks or other investments that generate a return higher than the prevailing rate of inflation (which is currently at 2%), you can earn additional income that would have been lost if they were used to pay off debt instead. In this way, early payoff has an indirect impact on your lifetime earnings potential and how much money you’ll have available for retirement.
When you are considering whether or not paying off your student loans early is worth it, there are a few things to keep in mind. First, if you have an interest rate higher than 3% on any of your loans, it may be worth paying more than the minimum required each month. This will allow you to pay down your debt faster and save more money in the long run by avoiding interest charges on what could otherwise be a large balance remaining after graduation day. Second, make sure that if you do decide to pay off some or all of these debts before retirement age (or maybe even earlier), then at least put something aside for emergencies or unexpected expenses like an emergency fund!