Rates & Fees

Rates & Fees

Most private student loans are variable-rate loans, with interest rates varying by lender. Your interest rate may adjust monthly, quarterly, annually, or at some other interval as designated by your lender.

The interest rate on a private student loan is generally determined by adding a variable index (such as LIBOR or T-bill) to a fixed margin. The margin used to determine your student loan interest rate can vary depending on your creditworthiness. Borrowers who are deemed more creditworthy typically qualify for lower margins (and thus lower interest rates).

Fees, like interest rates, will also vary by lender. The types of fees assessed, as well as the amounts charged, will depend on the lender and may also depend on your creditworthiness.

Here are some common lender fees you may run into, but keep in mind that not all lenders will charge all these fees:

• Application Fees: Fee charged in order for you to apply for a private student loan. Paying an application fee doesn’t guarantee approval of your application.
• Origination Fees: Fee charged in order for a lender to issue you (“originate”) your private student loan. Origination fees are often added into your loan amount. The origination fee you pay may vary depending on your creditworthiness — borrowers with stronger credit may pay lower origination fees than those borrowers with weaker credit.
• Repayment Fees: Depending on your creditworthiness, some lenders may assess a repayment finance charge at the time that your private student loan goes into repayment.