Student loans are often issued with pre-decided finance charges. Standard finance charges can be added onto the loan after every billing period. The finance charge may be figured by applying a periodic rate to the outstanding balance. This periodic rate should be discussed between the lender and the student before agreeing on the loan terms. If it is a variable rate program, then the finance charge will change each time accordingly. The quicker a loan is paid off, then the less the finance charges will apply. The higher the repayments, the quicker the repayments and this means that there is a reduction in the amount of times finance charges are applied thus saving money on the loan.

Other charges may occur if there is a late or incomplete payments, at times there may be pre-payment charges also. If the student has been issued with a credit card then they will be charged finance charges on top of this. The downside to a student credit card is that the finance charges can push them over their credit limit. It is important for a student to discuss this figures and charges fully with the lender before agreeing to the loan.

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