You likely know all about student loan interest rates. But what about the other fees for student loans.
Whether we’re talking about federal loans like the Stafford loan or private loans, there will be fees involved. And as you consider your loan options, you definitely want to know what fees you’ll be paying.
Here are the most common student loan fees that you need to look out for.
Common Student Loan Fees To Be Aware Of
There are some lenders that may require you to pay a fee on your student loan application. Most of the time, these are flat fees and nonrefundable. So whether your loan application gets approved or not, you will not get your money back for any application fees you pay.
Fortunately, there are student loan providers who do not require application fees. In fact, you’ll likely only find application fees for private loans. Federal student loan programs don’t have them. The good news is that these fees are becoming less common.
It comes as a surprise to many students and parents that an origination or disbursement fees are included when taking out a student loan. Lenders (both the federal government and private loan providers) will charge you an origination fee so they can issue your loan.
Origination fees are a percentage of your total loan amount. Lenders deduct the fee from your loan once you are approved before they issue out the loan for you. For instance, if your approved loan is $16000, a percentage of that will go to the lender. The origination fee changes every year on October 1st.
Late Payment Fees
Just like in any loans, a student loan also comes with a late payment fee. This means that if you miss a due date (and the monthly grace period), your lender can charge you a late payment fee.
This fee is usually a percentage of your minimum payment amount. Ask your loan provider how much they charge for a late payment fee so you can be informed.
Returned Payment Fees
There is also what’s called a returned payment fee where your lender can charge you any time you make a payment and it does not go through. This can either be a flat fee or a percentage of your payment. It is worth it to ask your provider how much their charge for returned payment fees.
This article is part of our series: Student Loan Advice for Online College Students
The next article in the series is: Student Loan Myths