choosing loan term Forum

[umichman]

If the interest rates are the same, is there any reason not to just pick the lowest required payment? Can't I just pay as much as I want each month if I have more left over? I just don't see the value of choosing the higher minimum?

[Clemenceau]

Would the term be longer with the lower required payment? Presumably a larger chunk of your payments would be going towards interest and not principal if the term is longer, even if you pay it off more quickly than required.

[LaLiLuLeLo]

I chose a shorter term to make myself pay off my loans. I'm pretty responsible with my money, but I didnt even want to take a risk that I'd be caught up in the beauty of making gobs of money.

[A. Nony Mouse]

Yeah, the longer term is going to incur more interest, so higher minimum --> paying off total more quickly --> less interest --> paying less. You could always take the longer term and then just pay it off more quickly, but then you could just sign on for the shorter term.

You can also change your plan at any time.