To repay your student loans, try to keep your monthly student loan payment at 10% or less of the net monthly income you plan to earn after you finish school.
Use a sample gross income to see the maximum monthly loan amount you could comfortably handle.
How much do you think you’ll be earning?
Once you come up with that amount:
The final number is the maximum monthly loan payment you could afford.
$ annual gross income x .8 / 12 x .10 = $ payment
Note: This formula assumes that your loan payment is 10% of your net income (take-home pay) and that your net income is 20% less than your gross income.
Be realistic about what your salary will be after graduation. Before you borrow, estimate the amount of debt you’ll be able to handle without a lot of financial stress.
Note: Your net income, or take-home pay is the amount you earn after taxes, insurance, or other costs have been subtracted from your gross income, the total amount you earn.
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