Most federal student loans charge fees that are a percentage of the total amount you borrow. The fee comes out of the amount of money that is paid out to you while you’re in school. It is important to take this into account when applying for a loan since the money you receive will be less than the amount you actually borrow.
Tip:Make sure you know when your first payment is due, what your interest rate will be, and how to contact your lender with questions.
All federal student loan programs carry a 1% fee that covers origination costs and protection if you default. The fee is usually deducted when you are issued the loan.
While most private student loan lenders don’t charge an origination fee, you can expect to pay between 1% and 6% for those that do
Private lenders often charge a loan application fee that is variable and non-refundable You pay the fee whether your loan is approved or not
There Are Many Types of Student Loans
The two main types of student loans are federal and private. Within each type are subsets that might appeal to you based on your credit history, financial need, and other factors.
Federal loans were established to help students with limited funds, or a poor credit history, receive a good education. Private loans offer customized options to students with a strong credit history.