Fixed Rate Student Loans Detail
For you to be worse off in the adjustable-rate loan, the average loan balance has to be subject to an average interest rate of more than 6.25 percent. For an amortized loan -- paid off in regular installments -- that's not all that likely, given today's interest rate environment. I'd pick the adjustable-rate student loan.
The table below shows the difference in total interest expense, assuming that both loans are amortized loans and that the adjustable rate stays constant over the next 10 years. An amortized loan is one in which the monthly payment is large enough to pay the interest expense and pay off the loan over the loan term.
Even if the loans aren't amortized, you should treat them as if they are, assuming no prepayment penalties, because you want the loans paid off at the end of the loan term without facing a balloon payment.
For you to be worse off in the adjustable-rate loan, the average loan balance has to be subject to an average interest rate of more than 6.25 percent. For an amortized loan -- paid off in regular installments -- that's not all that likely, given today's interest rate environment. I'd pick the adjustable-rate student loan.
The table below shows the difference in total interest expense, assuming that both loans are amortized loans and that the adjustable rate stays constant over the next 10 years. An amortized loan is one in which the monthly payment is large enough to pay the interest expense and pay off the loan over the loan term.
Even if the loans aren't amortized, you should treat them as if they are, assuming no prepayment penalties, because you want the loans paid off at the end of the loan term without facing a balloon payment.
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
Fixed Rate Student Loans
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