Capitalizing Interest - Explained

iGrad • GGGGE WHAT DO THEY MEAN by CAPITALIZING INTEREST? GGGGGO $4 II LOAN If you borrowed an unsubsidized loan or a PLUS loan, you are responsible for paying the interest during all periods, starting from the date of the first loan disbursement. You can choose to either pay it as it accrues (for example, while you are in school or during your %24 grace period), or let it accrue and be added to the principal balance of your loan. This is called "capitalization." 이 % .... UNSUBSIDIZED LOAN: CAPITALIZATION OF INTEREST EXAMPLE IF YOU PAY THE INTEREST AS IT IS CHARGED IF YOU DO NOT PAY THE INTEREST AS IT IS CHARGED $10,000 Capitalized Interest for 12 months (at the maximит rate of 6.8%) $0 $680 Principal to be Repaid $10,000 $10,680 Monthly Payment (Standard Repayment Plan) $115 $123 Number of Payments 120 120 Total Amount Repaid $13,810 $14,749 $939 PAYING THE INTEREST AS IT IS CHARGED SAVES YOU GRADPLUS LOAN: CAPITALIZATION OF INTEREST EXAMPLE IF YOU PAY THE INTEREST AS IT IS CHARGED IF YOU DO NOT PAY THE INTEREST AS IT IS CHARGED $15,000 Capitalized Interest for 12 months (at the maximum rate of 6.8 %) $0 $1,185 Principal to be Repaid $15,000 $16,185 Monthly Payment (Standard Repayment Plan) $181 $196 Number of Payments 120 120 Total Amount Repaid $21,744 $23,462 $1718 PAYING THE INTEREST AS IT IS CHARGED SAVES YOU iGrado |%