How Student Loan Interest Rates Work

Understanding interest rates is crucial to managing your loan. Here’s what you need to know:

• Fixed vs. Variable Rates: Fixed rates remain the same throughout your loan term, while variable rates may change.
• How Interest Accumulates: Interest adds up over time, so lower rates mean less money paid in the long run.

How to Get the Best Student Loan Interest Rates

Your interest rate is influenced by several factors:

• Credit Score: A higher credit score can help you secure a lower interest rate.
• Cosigners: If your credit score isn’t strong, a creditworthy cosigner can help you qualify for better terms.
• Shop Loan Offers not Marketing Rates: Marketing rates are often promotional figures that lenders use to attract borrowers. These rates may not reflect the actual rate a borrower will receive.

Student Loan Fees to Watch Out For

Loan fees can add up quickly if you’re not careful:

• Origination Fees: Charged by some lenders when you take out the loan.
• Late Fees: Charged if you miss a payment.
• No Fees: Make sure you understand what actions might be taken instead.