Key information to understand student loans includes being aware of the annual and cumulative loan limits, interest rates, fees, and loan term for the most popular private student loan programs. Often the interest rates, fees and loan limits depend on the credit history of the borrower and co-signer, if any, and on loan options chosen by the borrower such as in-school deferment and repayment schedule. Loan term often depends on the total amount of debt.
College/universities may charge a credit card processing fee (or convenience fee). This is in addition to the interest charges the credit card company imposes. Many lenders waive the origination fee. For certain borrowers, this may even make private student loans an attractive option over federal loan options (such as Parent PLUS and Grad PLUS programs).
Before you take out a loan, it’s important to understand that a loan is a legal obligation that makes you responsible for repaying the amount you borrow with interest. Even though you don’t have to begin repaying your federal student loans right away, you shouldn’t wait to understand your responsibilities as a borrower. Get the scoop: Watch this video about responsible borrowing or browse the tips below it.