Direct to Student Loan Interest Rates
The Interest rate is a combination of the LIBOR rate or the Prime rate, plus a margin. The margin is based on you and/or your cosigner's credit. The rate will fluctuate as the LIBOR or Prime rate changes. Applying with a credit worthy qualified cosigner may help you qualify for a lower rate.
LIBOR is an interest rate index used to determine the interest rate at which banks borrow funds from each other in the London Interbank market. It stands for the London Interbank Offered Rate. The LIBOR rate can be found in the 'Money Rates" section of The Wall Street Journal (Eastern Edition).
The Prime rate is a "reference or base rate" that banks use to set the price or interest rate on many of their commercial loans and some of their consumer loan products. The prime rate tracks fairly closely with other short-term interest rates, such as the overnight federal funds rate.
Fees can vary by lender. Applying with a qualified cosigner may reduce certain fees. Be sure to look carefully at the terms and conditions when applying for a loan.
Most private student loan lenders offer three options, including full deferment, immediate repayment of interest only, or immediate repayment of interest and principle.
No principal or interest payments are due while enrolled in school for half time or more (up to four or five consecutive years). Payment of principal and interest will usually begin 6 months after graduation, or if no longer enrolled at least half time. Interest will continue to accrue during the deferment period and will be capitalized (added to the loan balance) at the time of repayment.
Pay only accrued interest while enrolled in school (up to four or five consecutive years). Payment of principal and interest will begin after the loan is fully disbursed.
Payment of principal and interest will begin 45 days after loan is disbursed.