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Private Student Loans - Understanding Fees

Lenders often charge fees when you borrow money.

Fee Types

The most common types of fees associated with private student loans are:

How Fees Are Paid

Fees can be paid in different ways:
For example, if the lender assesses a fee of 5 percent and the loan amount is $10,000.00, the fee will be $500. One lender may take this fee from the principal, so you will actually receive $9,500.00. You must, however, pay back $10,000.00 to the lender, plus the interest. Another lender may add the fee to the principal and you will owe $10,500.00, plus interest and fees.

Be Aware of Miscellaneous Fees

Be aware of other charges, such as loan processing fees, and deferment and forbearance fees. Not all lenders assess these fees.

The key to understanding the fees associated with your private student loan is to read the promissory note before you sign it. This is a contract between you and the lender that says the lender will loan you money and you will repay it. Read it carefully, and do not hesitate to discuss it with the lender.