Prime Interest Rate
For a private education loan, the interest rate is calculated as the Prime
interest rate index (“Prime Index”) plus the applicable margin percentage.
For example, “Prime plus 1%” means that the interest rate is a fixed margin
of 1% above the value of the Prime Index.
The Prime Index is variable and changes quarterly on each January 1st, April
1st, July 1st, and October 1st. On each change date, the value of the Prime
Index is set at the highest rate of interest listed as the “prime rate” in
the Money Rates section of The Wall Street Journal on the first Friday of the
calendar month preceding the change date.
If The Wall Street Journal is not published or the prime rate is not listed on the
first Friday, then the immediately subsequent published prime rate will be used to
set the Prime Index. The Prime Index is merely a pricing index and does not represent
the lowest or best interest rate available to a borrower at any bank at any given time.
Quarter
- July 1 – September 30, 2007
- October 1 – December 31, 2007
- January 1 – March 31, 2008
- April 1 -
June 30, 2008
- July 1 -
September 30, 2008
Prime Index
- 8.25%
- 8.25%
- 7.50%
- 6.00%
- 5.00%
Example depicting APR and Monthly payment
Example depicts the APR and monthly payment on a $10,000 private education loan.
Interest rates are based on Prime Index of 6.00%. The APR and monthly payment
amounts may change if the interest rate changes.
Repayment example for College Students:
| Principal loan amount |
$10,000 |
| Origination fee |
$0 |
| Repayment Period |
180 monthly payments |
| Grace Period |
6 months |
| |
Interest Rate¹
|
|
Prime Index minus 0.5% (4.5%)
|
Prime Index plus 4.75% (9.75%) |
| Loan taken as |
In School APR |
Repayment APR |
Payment |
In School APR |
Repayment APR |
Payment |
| Freshman |
4.18% |
4.50% |
$91.85 |
8.42% |
9.75% |
$152.01 |
| Sophomore |
4.27% |
4.50% |
$88.41 |
8.74% |
9.75% |
$141.68 |
| Junior |
4.36% |
4.50% |
$84.97 |
9.10% |
9.75% |
$131.35 |
| Senior |
4.45% |
4.50% |
$81.53 |
9.49% |
9.75% |
$121.02 |
Repayment example for Graduate Students:
| Principal loan amount |
$10,000 |
| Origination fee |
$0 |
| Repayment Period |
240 monthly payments |
| Grace Period |
9 months |
| |
Interest Rate¹
|
|
Prime Index minus 0.5% (4.5%)
|
Prime Index plus 4.75% (9.75%) |
| Years in-school |
In School APR |
Repayment APR |
Payment |
In School APR |
Repayment APR |
Payment |
| One |
4.42% |
4.50% |
$82.38 |
9.39% |
9.75% |
$123.57 |
| Two |
4.33% |
4.50% |
$85.82 |
9.01% |
9.75% |
$133.89 |
| Three |
4.24% |
4.50% |
$89.26 |
8.66% |
9.75% |
$144.22 |
| Four |
4.16% |
4.50% |
$92.70 |
8.34% |
9.75% |
$154.55 |
1 The actual interest rate of the borrower might be different from the
one depicted above and will be based on the borrowers and cosigners
credit information