Student Loan Consolidation Calculator

A student faced with having to make repayments on several federal loans every month as well as with having to repay all of these loans within a set – and often all too short – amount of time after graduation should investigate whether it would benefit him to consolidate these loans, and this is where the student loan consolidation calculator comes into the picture.

A student loan consolidation calculator is a free financial tool that is available on almost all student-loan related internet sites that, when used, helps students determine whether it would be in their interest to consolidate their student loans. There are several advantages to consolidating student loans, not the least of which is that the student’s monthly payment amount would decrease, and loan consolidation is something that a student should think long and hard about. Further advantages to student loan consolidation would include the student’s having to make only one payment each month, having extra time – possibly up to 20 years extra time – to pay off the consolidated loan and having a loan that is locked into a lower interest rate.

The information that needs to be entered into the student loan consolidation calculator program relates exclusively to the student’s present federal loans and comprises each loan’s basic loan amount and base interest rate. It is extremely important that the correct interest rate be used, and should, for instance, the student be party to any incentive schemes with his present lenders that serves to lower the interest rate, these incentives should be ignored and the original, higher, interest rate entered.

Federal student loan interest rates also change from year to year, and a student should therefore ensure that they enter the most up to date interest rate. It goes without saying that, should the incorrect interest rate – or basic loan amount – be entered into the loan consolidation calculator, the student will be provided with an unreliable result. The majority of internet student loan consolidation calculators will, however, provide assistance – mainly in the form of an interest rate table – with determining the correct federal interest rate for each of the student’s loans.

Once all of the information required in respect of each individual loan has been entered, the typical loan consolidation program will provide the student with the following information: the total loan debt, the required minimum monthly repayment amount, the repayment terms (number of months needed to repay the loan), the interest rate relevant to the total loan amount and the total cost to the student (total loan debt plus total interest to be charged). This information will then allow a student to determine exactly how large a loan consolidation amount he will need and how long it will take him to repay the consolidated loan.

Lower monthly payments spread out over a longer period of time would obviously be attractive to any student, and those looking to consolidate their loans should make use of a loan consolidation program without delay.