This project analyzes how to optimally split a fixed monthly payment between two student loans — one from a Bachelor's degree (BSc) and one from a Master's degree (MSc). The goal is to either:
- Minimize the total repayment time, or
- Reduce the total interest paid across both loans.
It simulates concurrent loan repayment and explores different payment strategies using simple financial logic and Python.
Student loans can span multiple academic programs, each with different principal amounts and interest rates. Paying them off in parallel with a fixed budget can be challenging:
- Which loan should get a larger share of the monthly payment?
- What happens when one loan is paid off — should that money be reallocated?
- How much interest could be saved by tweaking payment strategies?
This notebook helps answer these questions by simulating real-world payment behavior.
| File/Section | Description |
|---|---|
simulate_loan() |
Simulates single loan repayment with interest. |
simulate_loans() |
Simulates concurrent repayment of both loans with reallocation. |
Scenario 1 |
Repayment using minimum required payments. |
Scenario 2 |
Boosted monthly payment of $100 extra, split between loans. |
Optimization routine |
Brute-force search over payment splits to find the best strategy. |
README.md |
You are here! Describes the project. |
- Define loan parameters: principal, interest rate, and monthly payment.
- Simulate repayment:
- Interest is accrued monthly.
- Payments reduce principal.
- If one loan is paid off, its share of the payment is redirected to the other.
- Evaluate different strategies:
- Minimum payments.
- Arbitrary extra payments.
- Brute-force search for the optimal split.
Feel free to submit issues, suggestions, or improvements!