In light of my recent posts, I thought I would take an opportunity to take a look at a student loan. The situation I looked at recently was a woman who owed $200,000 in student loans. What’s mind-boggling about that amount is that EVEN with no interest financing, her monthly payment would be…
Now, here’s that same loan with a 5% interest rate:
If you graduated from college with a $200,000 student loan, and you wanted to pay it back within 5 years, your annual payments would be over $45,000. If your goal is to pay it off in 10 years, your annual payments are around $25,000. That’s a lot of money at a time in your life when you don’t have a lot of money.
Of course there are variables in these numbers. The amount borrowed is pretty high at $200,000. Many college students will get away borrowing much less than that. Interest rates will also vary. It was my goal to give an estimate.
Every college student should take a good hard look at those two graphics BEFORE they accept a student loan. I’m planning more college-related posts in the future.