Calculate Monthly Payment For Student Loan

Calculate Monthly Payment For Student Loan

Calculating monthly student loan payments is simple, but it can be tricky if you’re not familiar with financial terms. In this article, we’ll walk you through the process of calculating your monthly payment and show how to do it using three different methods: addition and multiplication, the PMT function in Excel or Google Sheets, and a spreadsheet-based method (which can also be done in Excel or Google Sheets).

What Is A Monthly Student Loan Payment?

The monthly payment is the amount of money you pay each month to repay your student loan.

Your monthly student loan payment can change depending on many factors:

  • The interest rate on your loan
  • Whether you choose a fixed or variable interest rate (see above)
  • The term of your loan (the length of time it takes to pay off the debt)

How Do You Calculate Monthly Student Loan Payments?

The first step is to calculate your monthly interest rate. Your lender will have provided you with this information, but if not, there are several online calculators that can help you figure it out. The formula for calculating the monthly interest rate is as follows:

  • [finance charges/12] * [months in term] = [monthly finance charges]

For example, if a loan has a repayment period of 120 months (10 years) and an annual percentage rate (APR) of 10%, then its monthly finance charge would be calculated as follows:

  • 0.1 / 12 * 12 = 0.0083 or about 0.83%. This means that each month during the 120-month repayment period, 0.83% will be added on top of your principal balance as additional debt owed to pay off your student loan

Calculating Monthly Payments With Addition And Multiplication

Calculation of monthly payments using addition and multiplication is the same as calculating them with the PMT function, except it is easier to understand.

To calculate monthly payments with addition and multiplication, you need to know three pieces of information:

  • The total amount you must repay on your loan (loan amount)
  • The interest rate set by your lender. This number will be expressed as an annual percentage rate (APR). If you want to know what this number means and how it’s calculated, see our article on calculating APR.
  • How many years your loan will last (term length). Your credit union or bank will let you know how much time they expect their loans to last if they don’t give specific terms in their contract.

Calculating Monthly Payments Using The PMT Function In Excel Or Google Sheets

The PMT function can be used to calculate monthly payments, given the principal, interest rate and term. The syntax for this function is as follows:

PMT(rate, nper, pv[, fv][, type])

PMT Example For Excel Or Google Sheets

The PMT function is an Excel and Google Sheets formula that allows you to calculate the monthly payment amount for a loan.

In this example, we’ll use the PMT function in Microsoft Excel.

The syntax for using this function is:

=PMT(rate, nper, pv,[fv], [type])

Calculating Monthly Payments On A Spreadsheet

  • Enter the loan amount, interest rate and term in the spreadsheet.
  • Enter your monthly payment in the spreadsheet.
  • The spreadsheet will calculate how many years it will take to pay off your student loans if you pay only the minimum monthly payments each month.
  • If you want to calculate how long it would take for a student loan with an 8% interest rate over 4 years with monthly payments of $200/month (instead of just paying off the minimum), enter 200 for “monthly_payments” and then go into cell A2 on this page and use a formula like =FV(rate,nper,pmt,[pv],[fv]) .

It’s easy to calculate your monthly student loan payments.

If you’re paying your monthly student loans with a credit card, it’s easy to use a calculator or spreadsheet to calculate your monthly payment.

To make it even easier, you can use the PMT function in Excel or Google Sheets.

For most people, the math is simple and straightforward. If you’re having trouble with the process, don’t hesitate to contact a financial advisor or use a calculator like the one here on our site.

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