With students carrying an average of nearly $30,000 in student loan debt upon graduation, many are left wondering how they’ll payoff their loans. There are numerous repayment options for students. Sorting all of the interest rates, payments and scheduling can be tedious, and can add to a borrower’s stress if they don’t fully understand the details of their loans. So, we’ve created a detailed list of what the actual cost of a 30k loan is on various repayment plans.*

**Standard Repayment Plan; $30,000 Principal Amount; $50 Minimum Payment**

Standard repayment plans are the default status on loans, unless otherwise specified. Standard repayment plans have minimum monthly payments, usually around $50. Interest on a loan can add up quickly, so you may want to pay more than the minimum due.

Your monthly payment and total amount paid over the course of the loan will depend on your interest rate. Let’s look at some standard interest rates.

**Federal Direct Loan; 4% interest rate**. At this interest rate, your monthly payment would come to $304 per month. The total interest paid over the course of the loan would be $6,448, brining the total amount paid to $36,448. The repayment period on standard loans is 10 years, or 120 months. Let’s see another example with a higher interest rate.

**Federal Direct Loan; 6% interest rate**. At this interest rate, your monthly payment would come to $333 per month. The total interest paid over the course of the loan would be $9,967, bringing the total amount paid to $39,967. The difference in total amount paid between these two loans would be $3519 over a 120-month period. That’s an extra $29 per month. In order to have an equivalent total amount paid compared to the first example, you would have to pay $2,650 towards the loan initially before interest applies.

**Income-Based Repayment Plan; $30,000 Principal Amount; 4% Interest Rate**

The income-based repayment (IBR) plans are only available to qualifying graduates. This repayment plan takes a percentage of your discretionary income and uses it to payoff the loan. The monthly payment will depend on your income. For those who are new borrowers, they will pay up to 10% of their discretionary income but never more than the 10-year standard repayment plan monthly amount. The median income for a college graduate in the United States is around $47,000 per year. Let’s look at two different incomes.

**IBR; $47,000 per year income**. At this income rate, your monthly payment would be between $245 and $304 per month. The total interest paid over the course of the loan would be $7,141, bringing the total amount paid to $37,141. The repayment period in this case would be 128 months, or 10 years and 8 months. Compared to the first standard repayment plan example, you would be paying a little less per month but a little more overall.

**IBR; $35,000 per year income**. At this income rate, your monthly payment would be between $145 and $304 per month. The total interest paid over the course of the loan would be $11,366, bringing the total amount paid to $41,366. The repayment period in this case would be 177 months, or 14 years and 9 months. This is an additional $4,225 in total compared to the higher income example and $4,918 compared to the standard repayment example. Although this plan costs more in the long-run, it may be a better option for those with low income. If your income is too low, you may not be able to afford the standard repayment plan monthly amount.

In conclusion, different payment plans are clearly better for different borrowers personal situations and it’s most important to understand the different options before choosing a path.

*Visit Credible to learn how you can reduce your student loan interest rate via refinancing.*

**All calculations were made using the** **Federal Government’s Student Loan Calculator.*