[00:00:00] If you’re considering a MEFA loan to pay the college bill, it’s important that you understand what it will cost you when it’s time for repayment. MEFA offers a great tool that will help you estimate your potential monthly payment on a MEFA loan. Here’s how to use it. 

You’ll be asked to enter the amount that you plan to borrow and the years before graduation. So, if you’re entering your first year of college, you’d select four years until graduation. If it’s your second year, it would be three years, and so on. Finally, you’ll estimate your credit strength, since your repayment options and interest rate are determined by your credit score.

You can choose between good, very good, and exceptional. Now, a word of advice here, even if you think your credit score is exceptional, I always default to the middle of the road option of very good. Now, once you hit [00:01:00] calculate, you’ll be presented with each MEFA loan option and the estimated monthly payment amount for both the in school and out of school periods, as well as the estimated interest rate, APR, and the total cost of the loan for each repayment option.

Your total loan cost represents the sum of all of your monthly payments over the term of the loan. And it reflects the total amount that you’ll pay on the loan if you make every payment on time, no more and no less. Now, there are no prepayment penalties. And if you choose to pay more than what is owed each month, to pay the loan off earlier, your total loan cost will decrease.

Once you see your estimated monthly loan payment, make note that the amount reflected is for one year of college. So you may want to multiply that estimated amount for all the years you’ll be in college to get a rough estimate of how much your total monthly costs will be upon completion of [00:02:00] your education.

If you want to learn more about the total cost of borrowing, visit us at mefa.org/loans.