Rates and Fees
Rates and Fees
Two very important things that you need to understand as a borrower are interest rates and origination fees. Interest rates vary widely depending on the types of loans you qualify for. Origination fees also vary widely and can cause you to get less than expected if you do not understand them. Federal loans can have very low interest rates, while private loans can sometimes have no origination fees.
Accrued interest is something that borrowers often forget about when taking out student loans. This is one reason why knowing your interest rates is important because accrued interest for 4 years can be a lot of money. For example, accrued interest can be significant on private loans if it is not paid off during college. On the other hand, Stafford subsidized loans and Perkins loans do not accrue interest during college.
Learn how interest rates work with student loans. Also, view the different interest rates that different student loans have and how they can affect your overall student loan balance. Learn how accrued interest calculates so you can decide which loans are best for you!
Learn what an origination fee is and how they can affect the amount of money you receive from a borrower. Also, view the different origination fees by loan type. This will help prevent any surprises if you get less than you expect to receive because you get charged origination fees.