If you are a student who has taken advantage of the student loan program to pay your way through college, then you are not alone. However, you should have a good plan for paying back the loan over the expected 10-year period. More than this, if you have taken a loan to the tune of $160,000, then the expected monthly payment on that loan within the 10-year standard period should be calculated using the table below on a 6% APR.
| Payment Period | APR (%) | Monthly Payment ($) | Interest ($) |
| 1 | 6 | 13,771 | 5,248 |
| 3 | 6 | 4,868 | 15,230 |
| 5 | 6 | 3,093 | 25,595 |
| 7 | 6 | 2,337 | 36,339 |
| 10 | 6 | 1,796 | 53,159 |
How are student loan payments calculated?
Student loan payments can be determined using a combination of different factors. These factors help you calculate how much you can pay on a monthly basis with the aim of making the payment flexible enough to pay as you eat your income over your years of working. The factors used include:
The standard payment period
- The loans received by every student are expected to be paid off within their first ten years of earning income, especially when they are employed or maybe start a business. The standard payment period represents a valuable metric that can help you determine how much you can pay monthly.
- It should be noted, however, that provided you can pay off your loan faster and in less time, you do not have to stick to the standard payment period, as you can choose to pay your loans in half the time by doubling what is expected to be your monthly payment.
The Annual Percentage Rate (APR)
- The annual percentage rate is the interest rate that is charged on the loan taken. The APR increases over the years of time you choose to spread the payment of the loans.
- This means that if your original loan amount was $160,000, you will be repaying it with an additional interest on a yearly basis that will eventually increase the total payment of the loan.
Who is eligible to receive student loans?
Student loans are open to citizens of America, as the government aims at providing its citizens with access to better education that will help them be a better addition to the nation while also creating an opportunity for them to be able to better their lives. More than being an American, you should also meet the following criteria before receiving the loan.
- You must be an American citizen or an eligible non-citizen.
- You must have a social security number.
- You must have progressed satisfactorily in college or career school with proof of a solid academic performance.
- You must have also provided satisfactory academic performance in school with good grades.
- You must also have demonstrated financial need for the loan.
