Record low interest rate on student loans – Göteborgs-Posten

the interest Rate on student loans is becoming an all-time low. Arkivbild. Photo: Jessica Gow, TT

Economy the interest Rate on student loans is reduced to 0.34 per cent next year, the lowest level ever. It means lower payments each year or shorter avbetalningstid to CSN, depending on the type of loan you have.

the interest Rate on student loans almost halved next year, compared to the already low level of 0.6 per cent which has been in place for years. The explanation is the historically low interest rates for government borrowing, which is governing.

Lower interest rate means a lower overall cost for everyone with student loans. However for student loans taken before 2001 are not affected the annual amount. Borrowers pay four percent of their annual income regardless.

- When the interest rate is low, you pay more on the principal amount. You then pay off the loan faster, ” says Ulrika Åsemar, a lawyer at the CSN.

the Loans taken later, the so-called monthly installment shall instead be paid on a specified number of years and the interest rate does not affect the payback period.

- What happens is that the annual amount will be a bit lower, ” says Ulrika Åsemar.

Attractive loans

1.5 million people have student loans and are affected by the interest rate decision, formally taken by the government. For the average borrower with a debt of about 134 000 sek corresponds to the reduction around 1 900 sek per year, compared with the average for the period of the last decade

The low interest rates make student loans even more attractive, like Ingela Gabrielsson, privatekonom at Nordea. There are no reasons to consider other types of loans if you are going to study. Planning to at a later stage in life to pay extra on their loans should student loan come in last place.

- You are going to pay off the most expensive loans first, ” she says.

For example, is also the best mortgage significantly more expensive than a student loan. Next year’s interest rate on student loans can be compared to having a mortgage rate less than 0.5%.

investment options

To pay off their student loan early can be nice. But it is not obvious to do it, even if you suddenly have a large sum of money, continues Ingela Gabrielsson.

- It depends on the needs of the other, and what possibilities you have to invest the money and get a good return on them. You may weigh for and against.

Facts: impact on student loans by interest rate

So change the payments to the CSN at different interest rates (if the interest rate would be equal during all the year):

200 000 dollars in student loans taken 1989-2001, paid with four per cent of the income each year (300 000 in annual income at the start, annual salary increase of 1.5 per cent).

Interest Expense Avbetalningstid (years) 0.34 percent 5 101 16 1.0% 16 005 17 2.5% 57 712 21

monthly installment 212 000 sek (3 years of studies), paid off at 25 years.

• Interest Expense
• 0.34 percent 9 489
• 1.0% 28 568
• 2.5% 74 671

Source: CSN