10 Private Student Loan Vocabulary Words to Know
A private student loan lender can be a financial institution like a bank or credit union.
agrees to take equal responsibility for the loan. This should be a creditworthy adult who you know well.
Some lenders offer student loans specifically for parents or other adults to take out on behalf of the student.
Your rate will stay the same for the life of your loan, and you’ll know exactly how much your payment will be each month.
These interest rates are tied to an index. As the index changes, your monthly payment may increase or decrease.
Many private loans have the option to defer payments until graduation, but interest on the loan will still accrue.
Some loans require payments while you’re in school. These may be small amounts or interest-only payments.
A grace period is a period of time after graduation (or leaving school or dropping below half-time enrollment) before you have to begin making payments.
Some lenders offer benefits for borrowers. This may include an interest-rate reduction if you commit to making automatic payments, cash rewards for good grades, and others.
Some lenders charge fees, including application fees or late fees. It’s good to compare fees and benefits across lenders.
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