Yes. Lenders have two options when estimating repayment terms: they can use the allowable repayment period shown in the table below to calculate a fully amortizing payment or estimate a 1% (of the unpaid principal balance) payment.
In addition, if a borrower has multiple student loans, the lender may total their outstanding principal balances to estimate or determine the borrower’s total qualifying payment.
Several websites list the “current prevailing student loan interest rate.” For example, see the U. S. Department of Education Federal Student Aid website. The repayment period to be used when calculating a fully amortizing payment is specified in the table below.
To offer clarification and direction on popular topics, this content was selected directly from customer questions on Ask Poli. See FAQs: Student Loan Debt Requirements for more related questions.
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Yes. Lenders have two options when estimating repayment terms: they can use the allowable repayment period shown in the table below to calculate a fully amortizing payment or estimate a 1% (of the unpaid principal balance) payment.
In addition, if a borrower has multiple student loans, the lender may total their outstanding principal balances to estimate or determine the borrower’s total qualifying payment.
The “current prevailing student loan interest rate” can be found on a variety of websites. For example, see the U.S. Department of Education Federal Student Aid website. The table below specifies the repayment period to be used when calculating a fully amortizing payment.
| Calculating a Student Loan Repayment | |
| Total outstanding balance of all student loans | Repayment period |
| $1 — $7,499 | 10 years |
| $7,500 — $9,999 | 12 years |
| $10,000 — $19,999 | 15 years |
| $20,000 — $39,999 | 20 years |
| $40,000 — $59,999 | 25 years |
| $60,000 | 30 years |
Example: Calculating an Amortizing Payment
Balance: $17,500; Repayment period: 15 years; Interest rate: 4. 29%; Monthly Amortizing Payment: $132. 00.
To offer clarification and direction on popular topics, this content was selected directly from customer questions on Ask Poli. See FAQs: Student Loan Debt Requirements for more related questions.
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FAQ
How does Fannie Mae calculate student loans?
- 1% of the outstanding balance.
- The actual payment listed on the credit report.
- a calculated payment based on the specified loan repayment terms that will completely amortize the loan(s).
How are student loans calculated on a conventional loan?
In addition, the lender must figure each loan’s interest rate at 5% of the outstanding balance divided by 12 months (for illustration, take a $25,000 student loan balance multiplied by 5% to get $1,250; divide that by 12 months to get $104). 17 per month).
How does Freddie Mac calculate student loan payments?
Freddie Mac mandates that the lender use 0 if the credit report shows a zero payment on the student loans. 5% of the outstanding loan balance. For instance, if a borrower owes $24,729 in student loan debt, you would multiply that amount by zero. 5% = $123. 65.
Does Freddie Mac count student loans?
Freddie Mac counts the monthly student loan payment that is listed in the credit report when determining eligibility for financing. However, we will determine a payment amount if the loan is deferred or shows no payments on the credit report. 5% (of balance) as a minimum payment.