How much of a difference can a 1% change in interest rates make to your debt payments? More than you might think!
A single digit change might seem insignificant, but when applied to student loan or mortgage balances over time, even small changes can have a big impact.
Let’s look at an example. If your student loan is $300,000 with a 5% rate over a 20-year term, you’ll pay a total of just over $175,000 in interest over the life of that loan. Drop that rate to 4% and the total interest comes to just over $136,000 – a difference of nearly $39,000!
In the end, a 1% change in your interest rate could add up to thousands, or even tens of thousands of dollars in savings, depending on how many years are left on your loan. So shop around – just one small percentage point could put big money in your pocket!
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This information provided is for informational purposes only and does not substitute consultation with a legal, tax or investment professional for important financial decisions. Laurel Road assumes no liability for loss or damage incurred by use of the information provided. Please visit laurelroad.com for full product details, terms and conditions.
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