Using the student loan debt calculator
How to Decide if You Are Taking on Too Much Student Loan Debt
by Paige Estigarribia
7 Ways to Keep College Costs in Check
5 Ways to Save on Student Loans
How Does Your Student Loan Debt Stack Up?
Are you in the process of reviewing and finalizing fall college tuition and student loan documentation? If so, chances are you might be wondering whether you are taking on too much student loan debt. Using Bankrate's Student Loan debt calculator is a fantastic way to figure out how much debt you'll be taking on, and get you thinking about how much is too much. So how does the calculator work?
Step 1: Get the Tuition Amount
First, you have to figure out the net price of the tuition. This means that you take the sticker price of the tuition and subtract any scholarships or financial aid from the college. The difference is the net tuition price.
Step 2: Determine Your Parents' Contributions
The school will give you an expected family contribution amount. After receiving this amount, determine how much of it your parents can pay.
Step 3: Figure up the Amount You'll be Borrowing
Enter the loan amount, the loan term, and the interest rate to determine how much, including interest, you will need to borrow to cover the remaining cost of tuition.
Step 4: Decide if Your Anticipated Student Debt is Affordable
A good rule of thumb is that your total amount of student loan debt should not exceed your first year's salary, or about 10% of your monthly anticipated income.
Step 5: Research Your Job Options
Before you commit to student debt, do some research on what your potential career position will pay. Find out how much you can expect to bring home in your career after you graduate.
Step 6: Remember To Keep Debt Manageable
Remember that you don't know how much your first job out of college will pay until you land the job. Try and keep your student loan debt at an affordable level.
These steps will give you a good roadmap for determining how much student loan debt is too much.
Calculator: Are you taking on too much student loan debt?
Paige Estigarribia is a writer for The Dollar Stretcher who enjoys writing about food, frugal living, and money-saving tips. Visit Paige on Google+.
Take the Next Step
- These are the things you better know before you take out a student loan.
- Get more of your student loan questions answered by visiting the Dollar Stretcher Library.
- It is never too early to start saving. Compare money market rates with our best rate finder. Now is the time to start saving for your future.
- Get control of your financial life. Subscribe to Financial Independence, a free daily email that provides you with the tools to help you gain that control and achieve financial independence. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist for FREE!
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