Interest FAQ
General interest questions
- How does interest accrue on my student loans?
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Interest accrues daily on your student loan from the day it's disbursed until the day your loan balance reaches $0.00.
We use a simple formula to calculate your daily interest accrual:
Interest rate x current principal balance ÷ number of days in the year = daily interest.
- Capitalization of interest: What is it?
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It's the addition of outstanding accrued interest to the current principal balance of your loans.
Capitalization of interest results in a higher principal balance and additional finance charges over the course of repayment and may cause your monthly payment amount to increase.
- Can I change my interest rate?
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No. But you can reduce your interest rate by at least 0.25% if you sign up for Direct Debit.
Interest rates
- Fixed and variable rates: What happens if I have both on my loans?
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Having both fixed and variable interest rates may affect your monthly installment amount. For example, the monthly installment amount for loans that have a fixed interest rate may remain the same until the loans are paid in full.*
However, the installment amount on variable interest rate loans may change due to potential interest rate changes every July 1st.
If the interest rate... Then... Increases: It may raise the monthly installment amount. Decreases: It may cause the loans to be paid off earlier than anticipated. *Capitalization of interest may increase the monthly installment amount.
- If my rate increases, how will I know?
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We will notify you before July 31. This notification may be in the form of a letter or a change in the interest rate shown on your monthly billing statement.
You can also view interest rates and other detailed information about your loans online.
Interest rates and my monthly payments
- If my rate increases, will my payment increase?
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Monthly payments for student loans usually only change to ensure you can pay them off within the allotted loan term.
If the interest rate increases and calculations show that... Then your monthly payment... Your current monthly payment does not allow for you to repay your loans within your time frame, May increase.
You can repay your loans within the allotted term, Will not change. - If my payments increase and I can't afford them, what can I do?
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Review your options if you're having trouble making payments.
- Why isn't my balance going down after you apply my payment?