3.2 John currently has $37,001 in student loans he must repay at an interest rate of...

 

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3.2 John currently has $37,001 in student loans he must repay at an interest rate of 3.76%. He also has private loans totaling $4588 at an interest rate of 4.9%. He would like to pay both off in 20 years. A bank representative offered him an opportunity to consolidate both loans into one at an interest rate of 4.01% with an origination fee of $785. If the consolidated loan would be paid back over the same 20 years, would it be a good financial decision to merge both loans into one? Show why it would or would not in terms of the total interest he would repay in both scenarios. 3.2 John currently has $37,001 in student loans he must repay at an interest rate of 3.76%. He also has private loans totaling $4588 at an interest rate of 4.9%. He would like to pay both off in 20 years. A bank representative offered him an opportunity to consolidate both loans into one at an interest rate of 4.01% with an origination fee of $785. If the consolidated loan would be paid back over the same 20 years, would it be a good financial decision to merge both loans into one? Show why it would or would not in terms of the total interest he would repay in both scenarios.

Answer rating: 100% (QA)

To determine whether it would be a good financial decision to consolidate both loans into one lets compare the total interest paid in both scenarios k... View the full answer