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Deferment and Repayment of Your Student Loans
One of the benefits of a private student loan is that you have lots of ways of repaying it! Take a look at the options available and choose the one that makes the most sense for you.
Undergraduate Students
Option 1: Immediate Repayment
- Pay principal and interest beginning approximately 45 days after the first funds disbursement.
- Choose this option to save the most money as it allows for the maximum savings over the life of the loan.
Option 2: Interest-Only Monthly Payments
- Defer principal and pay only interest while you are enrolled in school for up to 4 consecutive years (up to 5 years if enrolled in a 5 year program) from the date of your first funds disbursement.
- Interest payments begin approximately 45 days after the first funds disbursements.
- Repayment of principal and interest begins approximately 45 days after graduation or if enrollment falls below half-time.
Option 3: Deferred Payment
- Make no payment while in school for up to 4 consecutive years (up to 5 years if enrolled in a 5 year program) from the date of your first funds disbursement. This is also known as the Deferred Principal and Interest Repayment option.
- Start your repayment of principal and interest approximately 180 days after you graduate or if your enrollment falls below half-time.
GradeSaver Undergraduate Student Loan Repayment Examples1
| Option 1 | Option 2 | Option 3 | |
| Immediate Repayment | Interest-Only Repayment | Deferred Repayment | |
| Amount Requested | $10,000.00 | $10,000.00 | $10,000.00 |
| Origination Fee2 | (3.00%) $309.28 |
(3.00%) $309.28 |
(4.50%) $471.20 |
| Principal Amount of Loan at Disbursement | $10,309.28 | $10,309.28 | $10,471.20 |
| Deferment Period | 0 Months | 48 Months | 48 Months |
| Monthly Interest Payment3 (while in school) |
(Included below) | $53.26 | (Deferred) |
| Principal Amount of Loan at Repayment4 | $10,309.28 | $10,309.28 | $13,395.14 |
| Monthly Principal & Interest Payment5 (after deferral period, if any) |
$75.05 | $75.05 | $97.56 |
| Repayment period | 240 months | 240 months | 240 months |
| APR6 | 6.58% | 6.51% | 6.58% |
| Total Finance Change7 | $8,012.00 | $10,568.48 | $13,414.40 |
Graduate Students
Your principal and interest are automatically deferred for up to 4 1/2 years as long as you are continuously enrolled at least half-time in school (includes six-month grace period).
Medical school students may request an additional deferment after graduation for up to four years while completing an internship or residency. Deferment cannot exceed program maximum of 8 1/2 years (includes six-month grace period). Full principal and interest payments will then begin after completion of the second deferment period.
Continuing Education Students
Continuing education borrowers begin repayment the earlier of a) 180 days after the student graduates or earns a certificate; b) 180 days after the student ceases to be enrolled; or c) two years after the date of the loan disbursement.
Parents of K-12 Students
Pay principal and interest beginning approximately 45 days after the first disbursement.
Interest Capitalization
For all loans, interest is capitalized once at repayment and then again at the end of any forbearance period. In addition, for loans in full deferment of both interest and principal, interest is capitalized quarterly prior to repayment.
Past Due Balances
Your loan can be used to finance any portion of your current academic year's educational expenses or to pay for past due balances from previous academic periods. Apply for past due balances separately from a current or upcoming-year loan.
You do not have to be currently enrolled to cover past due balances. Once you apply, a copy of a current invoice that demonstrates a past due balance must be provided.
For Undergraduate Students Only: If your loan is for a past due undergraduate expense and you are not currently enrolled in college, the only repayment option available is immediate repayment of both principal and interest.
Copyright (C) 2007 GradeSaver Loans LLC. All rights reserved.
The lender for Gradesaver Student Loans is RBS Citizens, N.A., Member FDIC and Equal Opportunity Lender. RBS Citizens, N.A. may sell your student loan to a third party. RBS Citizens, N.A. will only sell your student loan if the third party agrees to honor all of RBS Citizens, N.A.'s promises to you, including all promised benefits that you will receive or might become eligible for during the loan repayment period.
- This repayment example assumes a variable interest rate for the Gradesaver Undergraduate Loan equal to the LIBOR Index plus a margin of 3.50% for Options 1, 2, and 3. The interest rates used in this example and in effect as of 05/01/2008 are 6.20% for Options 1, 2, and 3. The interest rate margin ranges from 3.50% to 7.75% (APRs range from 6.51% to 11.89%), depending on the credit-worthiness of the borrower and co-signer, if any, and the repayment option selected. The LIBOR Index equals the one-month LIBOR published in the "Money Rates" section of the Wall Street Journal on the first business day of the preceding calendar month. LIBOR means the London Interbank Offered Rate. The interest rate and APR will increase during the life of the loan if the LIBOR Index increases. RBS Citizens, N.A., Member FDIC and Equal Opportunity Lender is the lender for the Gradesaver Undergraduate Loan. The loan terms described are for the 2007-2008 academic year and are subject to change.
- These repayment examples assume origination fees of 3.0% of the total loan amount (the requested loan amount plus the origination fee) for Options 1 & 2, and 4.5% of the total loan amount for Option 3. The origination fee ranges from 3.0% to 10.5%, depending on the repayment option selected and the credit-worthiness of the borrower and co-signer, if any. The origination fee, if any, will be added to and financed with the requested loan amount at disbursement.
- The amount shown here is the payment that will be made during the deferment period if the student elects to defer principal and make interest-only payments while in school. The monthly interest payment will increase if the interest rate increases. Interest-only payments during deferment do not reduce the principal balance of the loan. After deferment, full principal and interest repayment begins.
- Principal at repayment is the principal amount of the loan at disbursement plus, if you elect to defer repayment, interest that accrues during the deferment term under Option 3, where both interest and principal is deferred. Under Option 3, deferred interest is capitalized quarterly and at the time your loan enters repayment.
- Monthly payments under Option 1 will be fixed for the first year and then recalculated once each year based on the interest rate applicable at the time of the calculation and reset on the anniversary of your most recent repayment start date so as to pay the loan in full over the remaining repayment period. Monthly payments of principal and interest under Options 2 & 3 will be fixed for the first year when the loan goes into repayment and then recalculated once each year based on the interest rate applicable at the time of the calculation and reset on the anniversary of your most recent repayment start date so as to pay the loan in full over the remaining repayment period. If principal or principal and interest are deferred, the monthly payment amount shown here will increase if the interest rate increases and will be computed based on the interest rate applicable at the time repayment begins. Minimum monthly payments will be at least $25.
- Annual Percentage Rate (APR) is a measure of what a loan will cost. It takes into account the rate, fees, length of the loan, and the timing of all payments. The APR will increase if the LIBOR Index increases.
- Finance charge is the dollar amount the credit will cost and includes interest paid over the life of the loan, plus the origination fee, if any.