Parent PLUS loans have the most convoluted repayment choices of any federal student loan, which makes them tough to comprehend. The Parent PLUS Loan calculator will provide you with estimated monthly payments for the Standard plan, alternatives for refinancing the loan into either your name or your child's name, and income-driven repayment choices available via the Double Consolidation loophole.
Instructions for Making Use of This Calculator
Amount of the loan
Fill in the entire amount that you anticipate needing to borrow.
Interest rate
Input the interest rate that will be applied to the PLUS loan. The year you borrow money will affect the interest rate you pay. The current interest rate for PLUS loans for the 2022-2023 academic year is 7.54%.
Origination fee
Remember to include in the origination cost for your PLUS loan. For loans made on or after October 1, 2020, and before October 1, 2022, the cost will be 4.228% of the entire amount borrowed. You will not get the amount of money that you borrow when you take out a loan. After deducting the amount of the origination charge from the loan, you will be given the amount.
Understanding Results
How much you borrowed
The entire amount that you have borrowed.
An origination charge will reduce your loan balance
The origination charge has been deducted from the total amount that you have borrowed.
How much money will be given to your child for school supplies?
This is the entire amount, including interest, your student will receive from the PLUS loan you took out. It is the whole amount before deductions are made for the origination charge.
Monthly Payment
This is the lowest possible payment you must make each month throughout the payback period to remain current.
The sum that you will repay during the loan
Throughout the loan's payback period, the total amount you are responsible for repaying is the sum you borrowed, together with the interest that accrues daily and is included in your monthly bill. In most cases, the repayment period for PLUS loans is ten years or less.
This total does not include the Parent PLUS loan deferral that may be obtained. If you choose to postpone payments while your kid is enrolled in school, interest will continue to accumulate and will be added to the principal balance of the loan when it is finally time to start making payments; as a result, the total amount that you will have to pay back will be higher.
Make Use Of Your Findings to Cut Costs
You should pay more than the bare minimum
You may get ahead on your loan repayment by making payments that are more than the required minimum each month. The sooner you pay off your debts, the more money you'll save on the interest charges. Find out how to pay off your Parent PLUS debts more quickly.
Reduce the amount of money you pay every month
There are a total of five options for paying back the PLUS loan. With income-contingent repayment, your PLUS loan payment will be capped at 20% of your income or the amount you'd pay on a fixed 12-year repayment schedule, whichever is smaller if you're having problems making payments on the usual federal repayment plan of 10 years. Borrowers struggling to keep up with payments under the federal government's normal 10-year repayment plan have access to this alternative. Not only that, but it also provides for forgiveness once 25 years have elapsed. Participating in an income-contingent repayment plan will result in increased interest payments due to the taxation of forgiven debt.
When Is It Not A Good Idea To Have An Income-Driven Repayment Plan For Parent PLUS Loans?
You may determine whether or not an income-based repayment plan is in your best interest by considering the following criteria:
- Your payment under the REPAYE or ICR programs is comparable to that under the Standard 10-Year Plan.
- You are employed in the private sector, and your annual debts are much lower than your income.
- You have sufficient money, and you do not have any anxiety over paying your monthly student loan.
If you answered yes to all three of these questions, then it is likely in your best interest to refinance your Parent PLUS student loans to get a reduced interest rate so that you can pay off the loans more quickly. You can refinish a parent loan into either your own name or your kid's name (your child would have to agree to take on the debt with their own application).
You may determine how much you save on interest by doing a fast rate check with a lender, and if you finish utilizing their services, you will get a refinancing bonus of up to $1,050 as a thank-you for using them. If you want a far more powerful Parent PLUS loan payment calculator copy, submit your name and email address in the space provided below, and we will give you a copy that you can download and use.
