When refinancing your student loan, the question arises whether a person should calculate it manually or use a refinance calculator. There is an easy solution to it: it is better to use a refinance calculator. It is quicker, convenient, and mistake-free. Manual math can be used to make sense of how loans work, but it is longer and quite cumbersome. In this blog, we examine the contrast between using a student loan refinance calculator compared to manually calculating. You will discover how each approach operates and why the calculator can be a better choice for making financial decisions.
What Is a Student Loan Refinance Calculator?
A student loan refinance calculator is a tool that assists you in viewing how much you are going to pay after your loan refinancing.
You have to type in numbers like;
- The amount you owe.
- Your recent interest rate.
- The new rate you want to have.
- Number of years you will require to pay the loan back.
Then just sit back, the calculator will do maths for you.
- It will calculate your new monthly payments.
- The amount of money you save.
- The time it takes to pay off the loan.
It’s fast, easy, and helpful.
What Is Manual Math?
Manual math is human math; you do the math. You attempt to use a pencil, paper, or probably a computer, and write down the numbers. You go through adding, subtracting, multiplying, or dividing.
You can get formulas online to help, but it is time-consuming. It’s difficult. If you add something wrong, the numbers are going to be wrong.
You will have to;
- Calculate for yourself how much interest you have to pay.
- Calculate your monthly payment.
- You will have to compare old and new loans.
It’s a lot of work!
Why Using a Refinancing Calculator Is Better
These are the best reasons why a calculator is superior to manual math:
- It Is Faster
You get answers in seconds. Just input your loan data and click a button.
- It Is Easy
You do not have to figure out difficult math. The calculator does all the calculations for you.
- Helps Plan Better
You can experiment with other numbers. You can see what the outcome is if you alter the loan term or interest rate.
- Avoid Mistakes
Manual math can be easily screwed. A single error is enough to alter your outcomes. The calculator never goes wrong.
How Can Manual Maths Be Useful?
Manual math can be helpful for learning. If you are a finance student or just want to get a better handle on loans, doing the math on your own will help.
It can also be useful if you own no computer or phone.
However, for most users, the refinance calculator is better.
Guide to Use Student Loan Refinance Calculator
It’s not difficult at all, you just have to follow these steps:
- Find a good refinance calculator online.
- Enter how much you have.
- Enter your recent interest rate.
- Enter new interest rates.
- Select the time span or years to repay.
- Click on “calculate” or see the “ results”
Now you will be able to see;
- What will be your new monthly payments?
- The amount of money you will save.
- How long will it take to pay off all your debts?
You can enter and try with a new number repeatedly unless you find the right one.
Final Thoughts
Now, which one is best, the student loan refinance calculator or “old school” math?
A calculator is better suited for most people. It is easy, fast, and smart. It enables you to choose wisely the loan that you take and the repayment terms.
Manual calculation is fine for a general understanding. But if you want fast answers with no errors, use a calculator.
As far as saving money and time, the refinance calculator comes out on top!