We offer loans with a simple interest rate, which means that interest does not compound throughout the life of the loan. The rate you are charged is made up of two components: a fixed margin and a base rate. (We currently use 3-month LIBOR as the base rate). The fixed margin is a simple percentage between 5.0% and 8.0%. The base rate is a floating rate that will change throughout the life of your loan.
There is an administrative fee of 2.5% of the loan amount (with a minimum of USD 500). We fully amortize your administrative fee, which means that it is added to the loan amount once funds are sent to your school.
As an example, let’s assume that you take a loan for USD 10,000 and the admin fee is USD 500. When the funds are sent to your school, interest begins to accrue on the opening balance of USD 10,500.
During each month of your study and grace period, interest is calculated on this opening amount. Once your repayment period begins, interest is then calculated on the new opening balance. The new opening balance would be USD 10,500.00 + interest accrued during study and grace period. At the end of your study and grace period, interest is calculated each month on this adjusted principal amount.