@Anonymous wrote:Variable or fixed?
It depends primarily on your comfort with and ability to afford the risk of a variable rate loan. If you are the type who is going to lose sleep if interest rates start to climb, then choose a fixed rate (because it's not worth the stress). If you would be in danger of defalting if rates go too high, then choose a fixed rate (because the financial damage from that would be much worse that the extra interest).
However, historically, you're likely to pay less over the course of the loan if you start with the variable rate, so if you're comfortable and can afford it if it goes against you, then the variable rate is a good option.
7-year loan?
If the rates are the same, and you are confident that you will be discipled to make the additional principle payment every month, then there is no downside to the 7-year term. And there is an advantage in that if something unforseen happens, you do have the option to go back to your lower payment without refinancing. If the 7-year rate is higher, though, I would not the choose 7-year just for the sake of keeping that option open. If you know that you're going to be too tempted not to make the additional monthly priciple payment you're talking about, then forcing yourself to do it with a shorter-term loan would be wise.
(Edited for clarity)
Thank you Plip! I appreciate your input 
Here's my preaaproved loan for $50K with APRs and monthly payments below. If you were me, which one would you choose to loan for $50K?
Get Your Rate
Loan Amount
$50,000
$
Fixed Rate payment never changes
If your desired term is not shown, please call 1-855-456-SOFI to speak to a customer service representative.
Term Monthly payment Interest rate Lifetime cost
Variable Rate lowest payment today| SelectSelected | 3-year | $1,581.04 | 8.615% | $56,917.44 |
| SelectSelected | 5-year | $1,053.15 | 9.625% | $63,189.00 |
| SelectSelected | 7-year | $839.78 | 10.375% | $70,541.52 |
Initial payments and rates shown. The rate cap is 12.49%. If your desired term is not show, please call 1-855-456-SOFI to speak to a customer service representative.
Term Monthly payment Interest rate Lifetime cost
| SelectSelected | 3-year | $1,558.87 | 7.655% | Varies |
| SelectSelected | 5-year | $1,014.54 | 8.030% | Varies |
| SelectSelected | 7-year | $798.88 | 8.780% | Varies |
@Anonymous wrote:I could see doing that. It gives you just a little more wiggle room.
That's exactly what we did with our mortgage. We could have afforded a 15-year and saved a fraction of a point, but you just never know what is going to happen. So we went with a 30-year, just in case. But we still made the same payments we would have made on a 15-year (and usually a little more than that). We paid a little more interest over the years, but it was worth the piece of mind.
It sounds like that's the direction you're leaning. If it is, it's a valid choice that I would be very comfortable with.
Thank you . Yes you are right, I am leaning more on the 7 year and make payments like a 5 year loan, which can give me a little wiggle room along the way. Just want to clarify, so If I take the 7 year loan and make payments like the 5 year loan, will the loan be done in 5 years?
@Anonymous wrote:Pretty close. If you took out the 7-year loan and made the $1014/month payments, it would take just over 5 years and 1 month. The extra month would be because of the marginally higher interest rate.
If you made payment of $1032.59/month (on the 7-year loan), you would pay it off in exactly 5 years.
All that assumes interest rates don't go up.
By the way, for anyone interested, I used an amortization calculator to figure that out. You can google that and find them on the web.
Thank you very much Plip! You are a GREAT resource here in this forum and you have given me great advices and informations. I appreciate it! . Thank you and Have a great day
