Is it better to pay an unsubsidized student loan first and then the subsidized loan?
I know that the loan subsidized is when the government pays the interest while I'm at school. Here are the definitions of Calstate Sacramento. (the first site happens on google) but it doesn't say anything about the refund, any more than any other site. The reason I ask is because I can to all my payments on a loan or dispersed in both. I usually circulated on the two. • Subsidized loans are awarded on the basis of financial need. You will not be charged interest before you begin to repay the loan because the federal government subsidizes interests during this period. • The unsubsidized loans charge interest from the time when money is first paid until paid in full. Interest is capitalized, which means you pay interest on any interest which has already accrued. One way to minimize the amount of interest accrued is to pay interest as it accumulates
Your unsubsidized Stafford Loan Interest accrues from the day it is disbursed. While you're at school, and during any periods of deferment, your subsidized Stafford loans do not generate interest. However, once you enter repayment, the loan will accrue interest and they will do the same * rate *. In this sense, once subsidized Stafford loans from repayment, it becomes too "without subsidies." Thus, to answer your question: as long as your loans will both remain in reimbursement, you might as well pay divided equally between both. The only time you might want to put more money in your Unsub Stafford loan [as opposed to your Stafford Sub] is that if you plan return to school or application of any type of suspension (economic hardship, military, etc..) During periods of deferment, your subsidized Stafford loans would return while your subsidized Stafford Unsub continue to accrue interest. In this case, you'd probably pleased that the loan you want "money back" is one who will benefit from. [Keep in mind that abstention is not the same as the postponement "- in a state of forbearance, interest will accrue on subsidized loans and unsubsidized, in deferment, interest will not accrue on subsidized loans, but will still accrue on unsubsidized loans.] I want to say that at any given time, and in Stafford Unsub Stafford loans still carry the same interest rate. Currently, reimbursement borrowers pay interest of 5.3% on both. This rate varies annually every July 1st.
