How does interest accrue on my student loans?

Interest accrues on your student loans in North Carolina in the same way that it does in other states. When you take out a loan, the total amount you owe includes the principle (the amount of money you are borrowing) and interest. Interest accrues on your loan as time passes. The annual percentage rate (APR) of your loan determines the amount of interest that will accrue. Interest is charged on the amount of money you owe, which is your loan balance. As you make payments, your loan balance goes down but the amount of interest on your loan is still based on your loan balance. This means that you are charged interest on the remaining amount you owe. Interest accrues on student loans differently depending on the type of loan. For example, with a fixed-rate loan, the interest rate stays the same and the interest you owe is recalculated each month and added to your loan balance. With a variable-rate loan, the interest rate changes as market rates change and the amount of interest you owe is recalculated each month and added to your loan balance. In short, interest accrues on your student loans in North Carolina based on the APR of your loan, the type of loan, and the amount you still owe. As time passes and you make payments, your loan balance should decrease and the amount of interest you owe should decrease as well.

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How does interest accrue on my student loans?

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