Student Loan Forbearance Cost Calculator - How Much Will it Cost to Enter Loan Forbearance?
How much will it ultimately cost you to go into forbearance with your student loans? Use our interactive calculator below to find out.
Often times those who are unable to defer their loans while continuing their education or looking for work (medical residents, for example) may be tempted to apply for student loan forbearance. But this can have a tremendous long-term cost.
The numbers shown by default in the calculator detail the cost of doing a 4-year (48 month) forbearance with $120,000 in student loans that carry a 7 percent interest rate (such an example may be applicable to a recent medical school graduate with student loans entering their residency):
In total, forbearance would cost nearly $70,000!
The calculator below is interactive. Simply enter your loan details in the grey boxes below and the chart and numbers will automatically update.
About this Student Loan Forbearance Cost Calculator:
This calculator assumes that your student loan interest will be capitalized during forbearance. The calculator also assumes that interest is compounded monthly. This may not be the case with your loans.
This calculator is used only to provide an estimate and should not be used to make any financial decisions without a comprehensive review of your student loans.
Thankfully, we can help you out with that - Hylland Capital Management provides free consultations. If you are wondering the best course of action for your student loans, reach out and let us help you!
More information on Student Loan Forbearance
What is Loan Forbearance?
When you enter a status of forbearance in your loans, you are not required to make payments. Sounds great for while you are making little money while in residency, right? Not so fast…
Often times the interest that would be due is capitalized back into the loan. In other words, added to the principal balance of the loan. This starts a nasty cycle of interest building upon interest, and can make large amounts of student debt nearly impossible to get out of.
That is why as tempting as it may be, loan forbearance should not be your first option. You should consider deferment, income based repayment plans, refinancing, or cuts in your budget in order to make student loan payments.
What Loans are Eligible for Loan Forbearance?
You need to apply for loan forbearance. For those with federal (public) student loans, there are certain scenarios that are guaranteed to be accepted into forbearment, such as entering medical or dental residency.
Depending on your loan there may be limits to the length of forbearance, and the number of times a loan can enter forbearance. Especially if you have private loans, read your student loan terms to find out more.
Where Can We Learn More About Student Loans?
We have a very detailed 3 part guide to student loans available on our blog:
- Part 1 discussed the early years of college planning (sophomore year in high school and earlier),
- Part 2 discussed late stage college planning (sophomore year in high school through senior year in college)
- Part 3 discusses what you can do to save money in the late stages of college and after graduation.
Or as always, Contact Us for more information.