Student Loan Interest Rates

Interest accumulated on your student loans is a percentage of the original loan amount. This percentage is the interest rate and it is calculated and added each and every month there is principal due. That's why you need to find the best interest rate possible when shopping for a loan or loan consolidation. Everyone has to pay interest no matter what they borrow money for.

Some interest rates are fixed while other loans are variable. A fixed interest rate doesn't change providing your loan is in good standing. A variable interest rate adjusts based on the prime interest rate.

If you have an Unsubsidized Stafford Loan, your loan has accrued interest since the date of disbursement. As a student, you can pay the interest while you're in school. If you don't though, don't worry. The interest amount that you accrued while a student will be added to your principal loan amount automatically. If you have a Subsidized Stafford Loan, the interest is paid by the government while you're a student. You wont be responsible for any interest until after your grace period and you start paying back your loan.

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