1. Download the LoanPlanner tool. You will need Microsoft Excel to use the tool.

  2. Fill out the Inputs tab with the instructions embedded within the Excel file.

  3. If you believe your income will change drastically, go to the Inputs by Year tab to add in estimates of your income by year. You can also change your estimated family size by year on this tab.

  4. Once you've inputted your information, go to the Summary and Analysis tab to see your optimal strategy.

  5. The best comparison is to look at True loan cost: Net Present Value. This factors in the opportunity cost of investing. You can change the discount rate (expected investment income rate) which is defaulted to 8% per year.

  6. You can view other analysis variables by selecting the dropdown in the green cell.

  7. Scroll down on the same tab to view more detailed analysis by year. You can change the view by selecting a different variable in the green dropdown menu.

If you'd like to plan income increases in addition to the assumed income growth rate, such as for getting promoted, simply estimate an updated salary in the year you'd likely be promoted. The growth rate will recalculate for the subsequent years. Also use this tab to make different assumptions as to when your family size may change or potential inflation changes. 

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