How much will my student loan actually cost me?
Have a guess first. It sticks better.
Pick one. No sign-up, no catch.
A loan has three parts and people only ever look at one of them. The amount, the rate and the number of years. Change any one and the total moves, but the monthly payment is the only number anybody quotes you, because it is the smallest one.
At 8.94% over 10 years, $55,000 costs $83,392. The extra $28,392 is not a fee anyone announces. It is just what happens when you rent money for a decade.
The good news is in the last row. Interest is charged on what you still owe, so money paid early removes more of it than the same money paid late. Fifty dollars a month is one meal out.
Work it out with me
No formula to memorise. Five moves, and you can do this on any loan you are ever offered.
- Start with what you borrow.$55,000
This is the only number most people ever look at, and it is the one that matters least.
Run it with your own numbers →
Free, no account. Change anything and watch the total move.
Session 3: Getting out →
Avalanche versus snowball, what extra payments really do to a schedule, and the order to attack in.
- What does it really cost?
- Who gets paid if I say yes?
- What would this money do somewhere else?
Other straight answers