Private student loan costs can be broken down in several ways.
The first and most-obvious thing to consider are fees, which are one-time charges that usually attached to a specific service. For example, some lenders charge an application fee.
Next, you’ll want to look at penalties. Some lenders may charge a penalty for early pre-payment. There may also be penalties for late or missed payments. Note: None of Nitro’s preferred lenders charge fees or penalties as listed in the table below, which is one major reason we’re happy to recommend them. Only penalty to consider is missed payments.
Then, you’ll want to look at the largest cost of all: interest rates. Interest is how you pay the bank for giving you the loan. Interest is charged monthly, based on the annual percentage rate of your loan, or APR. The higher the APR, the most y ou’re going to pay every month, and ultimately, over the life of the loan. A fixed interest rate means that you’ll pay the same amount of interest for the life of the loan. A variable interest rate may fluctuate based on market conditions, meaning that your payments may increase or decrease over time.
Here’s how our preferred lenders stack up: