In partnering with Climb Credit, you’ll have the opportunity to work with our team to figure out which payment options are right for your learners. And when it comes to Climb Loans, one aspect that can have multiple effects is term length. Here Climb, we want you to understand the pros and cons of all options and how they will affect your students’ repayments. So, here are a couple numbers whose impact you should take note of, as you consider the right options for your learners.
Monthly payment amount
One number you and your students will want to pay attention to when deciding on loan terms is the monthly payment amount. The longer the loan term, the lower this payment will be. Though your learners may want to finish their loan as quickly as possible, they’ll also want to have a manageable amount to pay each month. So, it’s important to consider how monthly loan payments will interact with other expenses and what prospective students can reasonably afford.
Do your enrollees need help figuring out their budget and how much they can afford? To find current monthly expenses, add up last month’s credit card statement, housing expenses (e.g., monthly rent or mortgage), and any cash expenses. And check out these popular budgeting tools and methods!
Total repayment amount
But monthly repayment isn’t the only thing that should be focused on when it comes to loan terms. How long a repayment term is will also impact how much your learners pay in total. The longer the loan term, the higher the total amount is. After all, more months of repayment means more months of interest accumulation. So while it’s tempting to go only for the lowest monthly payments, it’s also important to factor in that borrowers might be paying more over time.
Each student will have a solution that best fits them; which solutions those are will depend on their own financial situation. Finding a loan term length with monthly payments they can afford — while accumulating the lowest possible total payments — is key to helping them keep up on monthly payments, maintain a strong credit history, and experience as little student loan–induced stress as possible in their lives.