Supplemental private student loans are one way students and families can fill the gap between available student financial aid — including federal student loans — and the total cost of college.
Private student loans must be repaid with interest. They are a serious financial obligation and typically cannot be discharged in bankruptcy.
Interest Rates, Fees and Benefits
Like other loans, private student loans have either a fixed or variable interest rate that is set by the lender. If you take out a Partnership Advance Education Loan from ISL Education Lending, you choose either a fixed or a variable interest rate and select your preferred repayment option when you apply. Interest accrues daily on student loans.
Private student loan borrowers may be charged fees, such as an origination or late fee, but may also qualify for benefits, such as interest rate or principal balance reductions and cosigner releases.
Interest accrues daily based on the principal balance of student loans as of that day and the interest rate.
Interest is calculated on student loans through a simple interest method using the following formula:
Principal balance x (interest rate / number of days in this year) x days since last payment = interest that has accrued since the last payment
For example, if you have a loan with a principal balance of $10,000 with a 6.40% interest rate and it has been 30 days since your last payment, your new outstanding accrued interest would be calculated as:
$10,000 x (0.064 / 365) x 30 = $52.60