How Student Loans Become Bad Debt
Failing to keep this simple equation in mind is how student loans quickly become bad debt. Remember, a student loan is a mortgage on your future earnings . When you buy a house, the collateral for the loan is the house. When you buy a car, the collateral for the loan is the car. If you don’t repay these loans, the lender simply takes the house or car. But when you borrow with student loans, the collateral is your future earnings. If you don’t repay your student loans, the government will garnish your future earnings.
to learn more about student loan debt calculations and how much you should borrow based on what your salary will be, visit the link below.
(Robert Farrington)
That being said it is very important we think into the future, when you will be paying back these loans. That’s right, voluntarily rather than them forcing you to pay the loans back. By setting up your student loans early on a biweekly payment plan that will allow an extra payment a year to go directly to the principle you can have your student loan paid off even earlier and eliminate some of the interest the bank would get back from you. Looking at the example below will show you how using the Biweekly Program that Nationwide Biweekly Administration offers could assist in the payoff.
Student Loan Analysis from Nationwide Biweekly Administration
Ran for a total debt of $29,400 at 4% interest rate.
For your customized analysis call (800)317-1756
Option 1)
Total Debt: $29,400
Interest Rate: 4%
Minimum monthly payment: $75
Pay off in 45 years!
Option 2)
Total Debt: $29,400
Interest Rate: 4%
Minimum Biweekly Payment: $40.45
Pay Off in 39.3 years (saving 69 months and $2,217.77 in interest)
Option 3)
Total Debt: $29,400
Interest Rate: 4%
Minimum Biweekly Payment: $65.45
Pay off in 20.1 years (saving 299 months and $19,195.63 in interest
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