If I were to take out a $20000 loan to use for four years of college, how long would it take to pay it back? Before answering the question, you have to learn about Government Subsidized loans, Un-Subsidized loans, and bank loans:
Government subsidized loans will pay the interest of the loans up until you graduate. An un-subsidized loan will charge you for the interest during your undergraduate education. A bank loan is a private loan made by a lender. During a private loan you will still have to pay while you are in school. The interest rate for a federal loan is 4.66%. The interest rate of a student bank loan is 4.75% through bank of america. The equation for finding the total amount of money you owe back if you took a subsidized loan of $20,000 is 20,000(1+0.0466)^15. This is if you were to pay it back over a 15 year period. You would then divide the amount you get by the amount of months it last to find how much you would pay each month. 39,604/180=about $220 a month.
Government subsidized loans will pay the interest of the loans up until you graduate. An un-subsidized loan will charge you for the interest during your undergraduate education. A bank loan is a private loan made by a lender. During a private loan you will still have to pay while you are in school. The interest rate for a federal loan is 4.66%. The interest rate of a student bank loan is 4.75% through bank of america. The equation for finding the total amount of money you owe back if you took a subsidized loan of $20,000 is 20,000(1+0.0466)^15. This is if you were to pay it back over a 15 year period. You would then divide the amount you get by the amount of months it last to find how much you would pay each month. 39,604/180=about $220 a month.