Question

Suzanne has a student loan balance of $25,904 with an average interest rate of 6.8 percent. Use the student loan repayment calculator (Links to an external site.)Links to an external site. to determine how much her monthly payment be if she selects the standard repayment option.

Answer 1

Since the problem is requiring us to use the loan repayment calculator and here is what the calculator gave:

Loan Balance: $25,506.00

Adjusted Loan Balance: $25,506.00

Loan Interest Rate: 6.80%

Loan Fees: 0.00%

Loan Term: 10 years

Minimum Payment: $0.00

Monthly Loan Payment: $293.52

Number of Payments: 120 months

Cumulative Payments: $35,223.07

Total Interest Paid: $9,717.07

It is projected that you will need an annual salary of a minimum $35,222.40 to be capable to have enough money to repay this loan. This approximation assumes that 10% of your gross monthly income will be keen to repaying your student loans. This resembles to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $23,481.60, but you may experience some financial difficulty. This corresponds to a debt-to-income ratio of 1.1.