Know Your Capitalization Fee
When taking a loan, there are so many technicalities, that it is natural for you to get confused. The problem is that in your confusion, you may not check up on some very important fact, which could impact your repayment greatly. One such issue is the capitalization period. While you are in school and not paying your loans, interest keeps accruing on the loan. Capitalizing means taking the interest you’ve accrued, adding it to your principal, then calculating later interest on this combined amount. Capitalizing more than once, at the end, means you’re paying compound interest - you’re paying interest on your interest.
Usually, most lenders capitalize this interest once, when you start repayments. However there are some lenders who will bury more frequent capitalization periods in the fine print. So it is important to ask about capitalization rules. And do not borrow from that lender if the answer is anything but “once, at the end.”