Education Loans Interest Rate and Repayment
The Interest rate is a combination of the One-Month LIBOR, plus a Margin. The rate ranges from the One-Month LIBOR + 2.5% to One-Month LIBOR + 8%. The rate will fluctuate as the One-Month LIBOR index changes. Applying with a credit worthy qualified cosigner may help you qualify for a lower rate.
LIBOR is an interest rate index used to determine the interest rate at which banks borrow funds from each other in the London Interbank market. It stands for the London Interbank Offered Rate. The Academic Answer product uses the current one-month LIBOR which can be found in the "Money Rates" section of The Wall Street Journal (Eastern Edition).
Loan Fee
There are no upfront or origination fees for the Act Education Loan. However, there may be a repayment finance charge depending on your, or your cosigner's, credit history. Applying with a qualified cosigner may reduce your fee.
If a repayment finance charge is applicable to your loan, the charge will range from 2% to 5.5% and will be assessed at the time of repayment.
Loan Repayment
You have three options including deferment or repayment of interest only or interest and principle.
Full Deferral: No principal or interest payments due while enrolled in school (up to four consecutive years). Payment of principal and interest will begin 6 months either after graduation or if no longer enrolled at least half time. Interest will continue to accrue during the deferment period and will be capitalized (added to the loan balance) at the time of repayment.
Interest Only: Pay only accrued interest while enrolled in school (up to four consecutive years). Payment of principal and interest will begin either 45 days after graduation or withdrawal from school.
Immediate Repayment: Payment of principal and interest will begin 45 days after loan is disbursed.
