Calculate money owed on shared loan

Question

I am in an interesting situation that I am looking for help with.

I went to college a number of years ago, as did my brother. My mother had two student loans (one for each of us) and a few years ago, combined them into one loan.

The problem is that I have been paying my portion of the loan payment to her and she has been paying the total amount to the loan company. My brother has not paid anything toward the loan.

I am in a position where I am able to pay whatever I owe in one lump sum, and I am just trying to figure out how to calculate that so that I am not paying too much or too little.

Generic numbers for example:

• My total before loan consolidation: $5,000.
• Brother's total before consolidation: $7,500.
• Total after consolidation: $12,500 (obviously).
• Interest rate of 10% (To make the math easier).
• Mother has been paying $250 a month for the loan.
• I have been paying $100 a month for the past 3 years.
• My brother has paid nothing.

I am trying to figure out how to calculate the remaining balance that I owe.

Any help is greatly appreciated.

Thanks in advance,

Jon

Answer 1

The way I read this, you've been effectively paying $100 per month toward a $5,000 loan at $10% per year. Excluding the fact that there is another balance attached to the loan.

After 36 months there's roughly $2,718 remaining on the $5,000, assuming there have been no late fees etc and your $100 is all that's being applied to your balance.

              Balance     Interest Paid      Payments Made
 Month 12     $4,267          $467              $1,200
 Month 24     $3,457          $857              $2,400
 Month 36     $2,563        $1,162              $3,600
 Month 48     $1,574        $1,374              $4,800

Answer 2

If you know the amounts that were combined ($5,000 and $7,500 in your example) -- NOT the original loan amounts necessarily -- then you can calculate a payment schedule (in Excel, Google Sheets, online, etc.) using that amount and the interest rate. You can then apply your payments ($100) to that payment schedule, making sure to either accrue interest if your $100 didn't cover the monthly payment, or pay down extra principal if your $100 more than covered the payment. The outstanding principal is the amount left or remaining balance.

A program like GnuCash or Quicken makes doing the payment schedule, and applying payments relatively easy to handle. Spreadsheets will require you to have 36 lines (3 years x 12 months) of payment and recalculation detail, but that shouldn't be too much work.

To be fair to your mother, make sure you include any partially accrued interest on the full balance when paying it off. Or even better, include a full month's interest in the pay-off amount.