Your repayment terms are important because they outline your responsibility as a borrower and ensure clarity about the financial commitments you’re making. Let’s walk through them together.
Total loan amount (including fees)
Very simply, this is the “principal” of the loan - the amount you’re borrowing from Fortify. It includes tuition for your program, and any fees that Fortify charges, like an origination fee.
Interest and other fees
Interest is the additional cost you pay on top of the initial loan amount. To read more about how it’s calculated, please read more here.
Other fees associated with your loan might include origination fees, late payment penalties, or other charges that will be specified in your loan agreement and final disclosure. Origination fees will be included in your total loan amount at the beginning of your loan, but other fees may be assessed separately.
Repayment period
Your repayment period defines how long your repayment period will last, and how frequently you’ll need to make payments. For Fortify loans, this period typically starts right after you sign your loan or start attending school - whichever comes later.
When the repayment period starts, your loan is “disbursed”, meaning that it starts to accumulate interest on the outstanding balance. Your first payment is due approximately 30 days after your repayment period starts.
Your payments will usually be made monthly, and your repayment period lasts for a predefined number of months, which you can find in your loan packet and final disclosure. The length of your repayment period influences how much you pay every month. With longer repayment periods, you will usually end up paying less each month, but the total amount that you pay by the end of the loan will usually be higher.
Why do my payments start immediately?
When your repayment period begins, your loan starts to accumulate interest over time. When you make payments as soon as possible, it helps prevent interest accumulation. Reducing your loan balance early means that less interest will build up. Interest can significantly increase your overall debt, making it more challenging to pay off loans in the long term.
Summary
Understanding these terms is important for managing your finances and planning for your future. You can make informed decisions regarding your educational investment by familiarizing yourself with the total loan amount, repayment period, applicable interest rates, and fees.
If you have any questions, please reach out to us and we’ll be happy to help answer any questions you may have.