Hi,

I am an International student from India studying in United States. I have taken student loan of about 35000$ from Citibank this year. I wanted to understand the finance charge and tax rate in one of the mail I got from them. This is what it says:-

Annual Percentage Rate:- 10.698 %
Finance Charge:- $ 99,455.20
Amount Financed:- $ 35,000.00
Total of Payments:- $ 134,455.20

Number of Payments:- 240 (20 Years)
Amount of Payments:- $ 560.23
When Payment Start :- 3/20/2014

I want to know that do I have to Pay Citibank about $ 135,000 Dollars or if I pay them early I can pay them less than that? I didn't really understand what fiancé charge means. Also can anyone let me know how I can save money when paying loan(Means should I clear my loan as soon as possible)? Please explain me properly how tax rate and finance charge works.

Thanks,

Jcage.

I have a student loan with Citibank too. The Finance Charge is the amount of $$ the bank is charging to give you the loan. This is the amount above what your loan of $35,000 is at a rate of about 10.7% per year.

There should not usually be a prepayment penalty, but please make sure you get your terms from the bank understood clearly, through their representatives on the phone, if you can't understand it in writing.

Usually, you will have six months after graduation before that first payment of $560 is due. If you can not pay at any time, you call the bank and explain why and they can give you an application for forbearance, deferrment, financial assistance in less of a payment.

Citibank has been easy to get on the phone. I suggest you speak with a rep and ask the questions so that you understand clearly. They will help. Each loan has it's own terms. It's just so amazing that they could make $100,000 off this loan! I would want to pay it off as early as possible or apply for a better rate as the years went by.

Thanks and yes you are right about talking to them on phone. I talked to on of the Representative and She told me that the $ 99,455 is there if I pay them loan by taking whole 20 years of time otherwise if I pay them pack in 3-5 years after my graduation I will just have to pay about $ 15000-20000 more on my loan as per the interest and time I take to pay it back.

Thanks for Info about the forbearance, deferment and financial assistance.