After graduating high school, and once your in college, you will have the option to use student loans to help support your financial needs. Loans vary from government subsidized and subsidized loans, bank loans, and credit union loans, all having different qualities. The qualities that define a type of loan is it's terms, interest rates, who can take out the loans, if students need a cosigner, or if you have to have a certain level of financial aid. Government subsidized loans and unsubsidized loans are the most similar of all of them. They are both similar, because the school determines how much you can borrow, they are both available to undergraduate students, you do not need a cosigner because it is guaranteed by the government, and interest rates range from 3.86% to 4.66% depending on what time of year you take out the loan. The difference is that subsidized loans are slightly better at helping students with financial aid, and the Department of Education pays your interest in you are in school at least half-time, the first six months after you leave school, or during a period of deferment. Also, in order to receive a subsidized loan, you must have financial need, but you do not need to show any financial need to receive an unsubsidized loan. While subsidized loans are also available to graduate students, you are always responsible for interest, and if you don't pay the interest, it will be added to the principal amount. The interest rates for graduate students range from 5.41% to 6.21% depending on the time of year you take it out. Credit union, bank, and PLUS loans are all different from subsidized and unsubsidized loans. Credit union loans and bank loans are similar in the fact that the school does not provide these loans, but they have many dissimilarities. A credit union loan has lower rates and fees, because they are nonprofit, and they are owned by the customers. You may have a higher chance of qualifying at a credit union, and if you become a member, you can use it whenever you like. Terms can last up to 15 years. Bank loans however, don't necessarily have a term, and have higher rates and fees than a credit union. PLUS loans are loans given out by the US Department of Education, and in order to qualify, you must not have an adverse credit history. The maximum amount you can take out is the cost of your attendance, with terms lasting up to 10 years.
In order to calculate interest and payments for these loans, you must use the equation
A=P(1+(r/n))^nt, where A is the total amount of money, P is the principal amount, r is the rate of interest, n is the number of times interest is compounded annually, and t is the total number of years. All government loans(subsidized, unsubsidized, and PLUS) are compounded quarterly, and private loans(bank and credit union) are compounded daily. If you use subsidized loans, you will not be responsible for interest until after graduation, but if you use unsubsidized, bank, credit union, or PLUS loans, you will be responsible for interest immediately. Also, if you use subsidized or PLUS loans, all rates will be the same for everyone. If you use unsubsidized loans, it will depend whether you are an undergraduate or a graduate/professional that will determine the rates. If you use bank or credit union loans, your income, credit, and financial need will determine how much your interest rates are.
If you are taking out $5000 every year you go to college, for four years, with a 6.8 interest rate, you will end up totaling $27,619.31 in total payments. This loan term will last 10 years, so you have 10 years to pay back $27,619.31. There will be 120 total payments of $230.16. You will pay $7,619.31 in total interest. With information, you will have to have a salary of at least $27,619.20 to live comfortably, and you will be paying roughly 10% of your gross monthly income.
http://www.finaid.org/calculators/scripts/loanpayments.cgi
https://studentaid.ed.gov/types/loans/subsidized-unsubsidized#subsidized-vs-unsubsidized
http://banking.about.com/od/creditunions/a/creditunionloan.htm
https://studentaid.ed.gov/types/loans/plus
http://www.staffordloan.com/repayment/
http://www.collegeforcreativestudies.edu/tuition-and-financial-aid/loans/federal-stafford-loans#do-i-need-a-cosigner
http://www.uwcu.org/Products/Loans/Student/Refinance.aspx
http://www.finaid.org/loans/parentloan.phtml
https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
http://starone.studentchoice.org/private-lending-solutions/undergraduate-students/interest-rates/
http://www.investopedia.com/articles/investing/020614/learn-simple-and-compound-interest.asp
https://qrc.depaul.edu/StudyGuide2009/Notes/Savings%20Accounts/Compound%20Interest.htm
In order to calculate interest and payments for these loans, you must use the equation
A=P(1+(r/n))^nt, where A is the total amount of money, P is the principal amount, r is the rate of interest, n is the number of times interest is compounded annually, and t is the total number of years. All government loans(subsidized, unsubsidized, and PLUS) are compounded quarterly, and private loans(bank and credit union) are compounded daily. If you use subsidized loans, you will not be responsible for interest until after graduation, but if you use unsubsidized, bank, credit union, or PLUS loans, you will be responsible for interest immediately. Also, if you use subsidized or PLUS loans, all rates will be the same for everyone. If you use unsubsidized loans, it will depend whether you are an undergraduate or a graduate/professional that will determine the rates. If you use bank or credit union loans, your income, credit, and financial need will determine how much your interest rates are.
If you are taking out $5000 every year you go to college, for four years, with a 6.8 interest rate, you will end up totaling $27,619.31 in total payments. This loan term will last 10 years, so you have 10 years to pay back $27,619.31. There will be 120 total payments of $230.16. You will pay $7,619.31 in total interest. With information, you will have to have a salary of at least $27,619.20 to live comfortably, and you will be paying roughly 10% of your gross monthly income.
http://www.finaid.org/calculators/scripts/loanpayments.cgi
https://studentaid.ed.gov/types/loans/subsidized-unsubsidized#subsidized-vs-unsubsidized
http://banking.about.com/od/creditunions/a/creditunionloan.htm
https://studentaid.ed.gov/types/loans/plus
http://www.staffordloan.com/repayment/
http://www.collegeforcreativestudies.edu/tuition-and-financial-aid/loans/federal-stafford-loans#do-i-need-a-cosigner
http://www.uwcu.org/Products/Loans/Student/Refinance.aspx
http://www.finaid.org/loans/parentloan.phtml
https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
http://starone.studentchoice.org/private-lending-solutions/undergraduate-students/interest-rates/
http://www.investopedia.com/articles/investing/020614/learn-simple-and-compound-interest.asp
https://qrc.depaul.edu/StudyGuide2009/Notes/Savings%20Accounts/Compound%20Interest.htm