WHAT YOU NEED TO KNOW
ABOUT
A private educational loan requires repayment to the lender. Most private educational loans offer deferment of payment until six months (can vary) after graduation or withdrawal from school. During any period of deferment interest is accruing, increasing the amount of the loan.
Private
educational loans rarely have death or severe disability cancellation
provisions as the federal student loans offer.
Before
resorting to a private loan you should exhaust all alternatives. Look into the following options.
ALWAYS file for federal financial aid by completing the
FAFSA. Apply for any available federal
loans before private loans. Federal
loans provide better repayment terms and conditions than private loans.
Use earnings from work to help cover tuition, fees,
room, or board changes. Could you cover
your room and board with earnings from work?
The majority of college students are employed in on or off-campus
positions. If you live like a college student
while in college, maybe you won’t need to live like a college student after
graduation.
Are your parents providing financial support for
your college costs? The federal
government's need analysis formula calculates the Expected Family Contribution
(
Can you reduce the educational expenses being
incurred (are you living in an expensive apartment, do you need to purchase a
computer, etc?) Are you budgeting
wisely, spending your money on your needs instead of wants? These questions influence the amount of money
that you have available to cover your tuition, fees, room and board. Any amount that you can deduct from a private
educational loan will benefit you in the end.
ESTIMATED
MONTHLY PAYMENTS
Loan Amount 8% interest rate 10% interest rate 12% interest rate 14% interest rate
$5,000 $60.44 $66.08 $71.74 $77.63
total interest $2,279.90 $2,928.65 $3,607.76 $4,326.44
total paid $7,279.90 $7,928.65 $8,607.76 $9,326.44
$10,000 $121.33 $132.15 $143.47 $155.27
total interest $4,559.16 $5,858.15 $7,216.62 $8,631.48
total paid $14,559.16 $15,858.15 $17,216.62 $18,631.48
Loan amount 8% interest rate 10% interest rate 12% interest rate 14% interest rate
$20,000 $242.66 $264.30 $286.94 $310.53
total interest $9,118.32 $11,716.30 $14,411.24 $17,264.35
total paid $29,118.32 $31,716.30 $34,411.24 $37,264.35
Loan amount 8% interest rate 10% interest rate 12% interest rate 14% interest rate
$10,000 $83.64 $96.50 $110.11 $124.35
total interest $10,075.89 $13,161.66 $16,425.03 $19,846.74
total paid $20,075.89 $12,161.66 $26,435.03 $29,846.74
$20,000 $167.29 $193.00 $220.22 $248.70
total interest $20,148.43 $26,323.31 $32,850.06 $39,693.48
total paid $40,148.43 $46,323.31 $52,850.06 $59,693.48