Help with subsidized loan ?

[-Goose-]

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Hey financial gurus-

I am a little confused by how the subsidized federal loan process works. People keep saying this type of loan is 'interest free,' but I never believe in free lunch. When does the interest on this portion of a loan begin to accumulate and how much are the borrowing fees, etc?

😕

Thanks!

 

[It'sElectric]

The interest will only begin accruing once you go into repayment on it. Thus, it is interest free during school, residency, and whatever other deferral period. There should be no borrowing fees for either of the stafford loans, if I'm not mistaken.

 

[mshheaddoc]

Other than interest, is there any charge to get the loans?
You’ll pay a fee of up to 4 percent of the loan, deducted proportionately from each loan disbursement. (Part of the fee is for insurance used to pay off loan defaults; the rest reduces the cost of the loan to the government.) Because of this deduction, you’ll receive slightly less than the amount you’re borrowing

http://studentaid.ed.gov/students/publications/student_guide/2004_2005/english/types-stafford.htm

 

[bbam44]

I just receieved my fin aid package yesterday. They gave me both sub and unsub stafford for 8500 plus 34000, then they offered me a T.H.E. private loan for 14500. I know how the staffords work, but what about the THE, can anyone help??

 

[It'sElectric]

http://studentaid.ed.gov/students/publications/student_guide/2004_2005/english/types-stafford.htm

Most good lenders, such as T.H.E., do not charge you these fees.

http://www.northstar.org/Med/ZeroFees.aspx

 

[abbaroodle]

Does anyone know what it takes to be in repayment to receive the bonus? I am thinking, if I am paying off a piece of my loans every month, even though I am still in school and not required to (say $100 a month), does that mean I am in "repayment" and thus eligible for the interest reduction?

 

[UserNameNeeded]

Does anyone know what it takes to be in repayment to receive the bonus? I am thinking, if I am paying off a piece of my loans every month, even though I am still in school and not required to (say $100 a month), does that mean I am in "repayment" and thus eligible for the interest reduction?

That's a very good question. You should call your lender and ask. Let us know what they say!