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Loan Principal Formula:
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The Student Loan Limit Calculator determines the maximum loan amount you can borrow based on your affordable monthly payment, interest rate, and loan term, while respecting federal or private loan limits.
The calculator uses the loan principal formula:
Where:
Explanation: The formula calculates the present value of an annuity (series of equal payments) considering the time value of money.
Details: Understanding your maximum affordable loan amount helps prevent overborrowing and ensures manageable repayment obligations after graduation.
Tips: Enter your comfortable monthly payment, current interest rate, desired repayment term, and select loan type. The calculator will show your maximum recommended borrowing amount within standard limits.
Q1: What are federal student loan limits?
A: For undergraduates: $5,500-$12,500 annually (dependent status), $57,500 total. Graduates: $20,500 annually, $138,500 total (including undergrad loans).
Q2: How do private loan limits differ?
A: Private lenders typically set aggregate limits around $50,000-$500,000, often based on creditworthiness and school certification.
Q3: Should I borrow the maximum amount?
A: Only borrow what you need. Consider future earnings potential and repayment obligations before maximizing your borrowing.
Q4: How does interest rate affect borrowing capacity?
A: Higher rates reduce the amount you can borrow while maintaining the same payment. A 1% rate increase can decrease borrowing power by 8-10%.
Q5: Can I change repayment terms after borrowing?
A: Federal loans offer flexible repayment plans (10-25 years). Private loans may have limited options for term changes after disbursement.