DUO Student finance amortization scenarios

Louis de Bruijn | Dec. 8, 2022 | #compound #interest #amortization


The Dutch government have introduced student finance via a system of grants and loans. This application focuses on visualising the debt as part of your student finance loan and will help you understand which part of your monthly instalments go towards paying off the principal loan amount. and which part inevitably go towards to the interest on the loan in different interest rate scenarios. First, we'll explain the context for these student financing loans.

Once your student finance ends in your last study year, a preliminary phase begins on 1 January of the following year. This is a period of 2 years during which you do not have to make any repayments. At the start of the preliminary phase, the interest rate is fixed for a 5-year term period. Interest can accumulate in the preliminary phase, although no installments are made yet. Interest rates are fixed for 5-year term periods: for a 35-year loan there are 7, and for a 15-year loan there are 3 fixed-interest periods.

The interest rates are determined around October for each consequent year. The interest rate is linked to the average effective yield on a long-term government bond. The effective yield is the interest rate at which the present value of the bond (calculated using the price and accrued interest) equals the present value of all future proceeds (interest payments and principal payments).

Nobody can predict the effective yield on long-term government bonds, so in this application you can make your own predictions for each of the 5-year fixed interest period for your loan term. To get an idea of how interest rates change, please have a look at the interest rate graphs published on the Dutch central bank's website.

Note, that the calculation for the monthly payment will not correspond perfectly with the actual amount DUO will charge you monthly. That information is not publicly available, so its formula can not be reproduced correctly.


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Interest rates
Year 15-year 35-year
2006 2.74% 2.74%
2007 3.7% 3.7%
2008 4.17% 4.17%
2009 3.58% 3.58%
2010 2.39% 2.39%
2011 1.5% 1.5%
2012 1.39% 1.39%
2013 0.6% 0.6%
2014 0.81% 0.81%
2015 0.12% 0.12%
2016 0.01% 0.01%
2017 0.0% 0.0%
2018 0.0% 0.0%
2019 0.0% 0.0%
2020 0.0% 0.0%
2021 0.0% 0.0%
2022 0.0% 0.0%
2023 1.78% 0.46%