9 Student Loan Mistakes that Could Make Interest Soar
There are a few mistakes that can cause some borrowers to pay more interest than they need to.
Student Loan Mistakes
In most cases interest continues to accrue while payments are on pause. The longer borrowers remain in forbearance, the more they may have to pay in the long run
Forbearance When It Isn’t Absolutely Necessary
Extending the payment term would mean the borrower has to pay considerably more interest over the life of the loan.
Unnecessarily Extending the Repayment Period
Prioritizing the loan with the highest interest rate can make more sense mathematically and might be more efficient for those who have the discipline to stick with it.
Starting Accelerated Repayment Efforts with the Wrong Student Loan
If a borrower doesn’t pay the interest as it accrues, that interest can be capitalized, or added back onto the principal balance of the loan
Underestimating the Impact of Interest Capitalization
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