If you’re currently managing the challenges of student loan repayment, you’re certainly not alone. Paying off student loans isn’t fun, but it can be easier – and more affordable – with a revised approach to your current repayment plan.
You may not realize, but paying more than your minimum monthly payment or making a lump sum payment can help save you significant money over the life of your loan. Not only does it help reduce the amount of interest that will accrue, but it will allow you to pay of your loan sooner.
Check out the examples below:
Example 1: Add A Little Extra To Your Payments
Let’s say your current loan balance is $50,000 on a 20 year loan with an interest rate of 8.25%. Your current amortized payment amount is $426. Look what happens if you pay an extra $50 each per month:
Original Loan, paying $426/mo:
Time: 20 years
Interest: $52,261
Total Amount Repaid: $102,261
With increased payments, paying $476/mo:
Time: 15 years and 7 months
Interest: $38,977
Total Amount Repaid: $88,977
Total Savings:
Time saved: 4 years and 5 months
Interest saved: $13,284
By paying an extra $50 per month, you could pay off yor student loan 4 years and 5 months earlier and save $13,284.
Example 2: Make a Lump Sum Extra Payment
Let’s say your current loan balance is $50,000 on a 20 year loan with an interest rate of 8.25%. Your current amortized payment amount is $425. Look what happens if you make a one-time lump sum, extra payment of $1,000.
Original Loan, paying $426/mo:
Payoff date: October 2038
Loan total: $102,261
After Extra Payment:
Payoff date: October 2037
Loan total: $98,269
Total Savings:
Time saved: 12 months
Total saved: $3,993
By making a one-time, lump sum extra payment of $1000, you could pay off your loan 12 months earlier and save $3,993.
Additional information:
If you are interested in increasing your payments, setting up recurring paying, or viewing your loan status, log in to UAS. As a reminder, your Harvard FCU student loan is serviced by our loan servicer, UAS.
Questions about your situation? Contact our Educational Lending team. We’re always here to provide advice and guidance to assist with the successful repayment of your Harvard FCU student loans.