Other factors that could affect your total student loan cost
Late fees
Loan servicers may charge a fee if a payment is late. This can further affect your student loan costs. To help avoid late payments, set up auto debit. Your payments will be automatically deducted from your bank account at the same time every month. Just make sure you have enough money in your account each month to cover your payments.
Payment-related fees
Loan servicers may charge a fee for returned checks or insufficient funds in your bank account.
Variable interest rates
Variable interest rates may go up or down due to an increase or decrease to the loan's index. This may impact your monthly payments and total student loan cost. If you’re looking for predictable monthly payments, consider a fixed interest rate. But keep in mind that you could have higher monthly payments with a fixed interest rate than you would with a variable interest rate.
When does interest start on a student loan?
If you choose a loan that does not require you to make payments while you’re in school, interest will keep adding up and will increase your total student loan cost. Choosing a repayment option where you make payments while in school will help reduce your total student loan cost.
Deferment and forbearance
A deferment allows you to temporarily suspend payments on your student loan under certain circumstances, which may include going back to school, or enrolling in an internship or residency program. Keep in mind that while in deferment, interest may keep adding up and increase your total student loan cost.
Forbearance may let you temporarily postpone your loan payments. It can help you avoid delinquency and default if you're facing temporary financial difficulty. While you’re in forbearance, you may not have to make payments. However, interest may continue to accrue. At the end of your forbearance period, the interest may capitalize (be added to your loan’s principal), so your total loan cost may increase.
