5 Tips How Interest is Calculated on Education Loans

Know the type of interest rate: Education loans can have fixed or variable interest rates. A fixed interest rate remains the same throughout the loan term, while a variable interest rate can change based on market conditions.

Determine the loan repayment term: The loan repayment term affects the total interest paid on the loan. Longer repayment terms may result in more interest paid over the life of the loan.

Pay on time:  Late payments can result in late fees and penalties, which can increase the overall cost of the loan.

Consider making extra payments: Making extra payments can help to reduce the outstanding principal balance of the loan, which can lower the total amount of interest paid over the life of the loan.

Look for ways to lower the interest rate: Some lenders offer incentives for borrowers who sign up for automatic payments or who have good credit scores.

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