Student Loan Calculator – Introduction

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Terms related to a student loan calculator

Loan amount

The loan amount is that amount which has been taken or rather borrowed for the education. In other words, loan is stated to be the amount which is given to an individual at some pre – decided interest rate. Apart from this, generally, when a loan is given then the borrower receives the initial amount & this is known as the principal amount which is to be returned.

Student Loan Calculator

Interest rate(r):
Duration in months(n):
Total Loan repayment:

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Rate of interest

Some people also know this rate of interest as the interest rate & this happens to be the charges which are added to the principal amount. Moreover, these charges keep fluctuating as it depends on the reason for taking the loan apart from the term & the lender. Hence this interest rate is never the same. But when the talk revolves around the student loan then generally the interest rate is lower than the others.

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What is meant by loan term?

For a student loan, one comes across the term, loan term quite often. This term is also known as the repayment term which means that it is the duration in which one has to repay the amount or money that is borrowed.

How to use a student loan calculator?

In the 1st field, you will have to enter the loan amount & this is to be followed by the loan term. The loan term can be mentioned either in years or in months. In the next field, one will be required to mention the interest rate; remember that this rate of interest is calculated annually. After this enter the monthly payments & click on calculate. If at all you have any other extra payments then you can mention them as well before clicking on the recalculate tab.

Formulae related to student loan calculator

  1. Student loan EMI repayment calculation

\(E.M.I\quad = \quad \frac {(p\quad \times \quad r\quad \times \quad (\quad 1\quad +\quad r\quad )\quad^n\quad )}{((\quad 1\quad +\quad r\quad )^n\quad )}\quad -\quad 1\)

\(Total\quad loan\quad repayment\quad =\quad EMI\quad \times \quad n\)

In the above equations, EMI represents the equated monthly instalment whereas P is the loan amount while the interest rate is represented by r & the duration or period is denoted by n.

  1. Loan Payment formula

\(P\quad =\quad \frac {r\quad (PV)}{1- (1+r)^{-n}}\)

On the other hand, the above equation is about the loan payment & the terms used in the equation mean the following – P is for the payment while present value is represented by PV. In addition to this, the rate per period is denoted by r while the duration or the number of periods are represented by the letter n.

  1. Loan payment formula

There is another formula to calculate the loan payment & it has been mentioned below –

\(P\quad =\quad \frac { P\quad V}{P\quad V\quad I\quad F\quad A}\)

In the above equation, P stands for the payment or the loan amount while PV is the present value. On the other hand, PVIFA replaces the variables in the formula mentioned above.

Thus, by using any of the aforementioned equations or the formulae, an individual will be in a state to calculate the student loan in a simple manner.