Does OSAP start to accumulate interest in June 8.5 percent?

[Guest kaolausb]

I heard that OSAP starts to accumulate interest starting June 8.5 percent annual, compounded daily.... IS THAT TRUE PPL?>: >: >: >: >: >: >: >: >: >: >:

[Guest JewelLeigh]

Unless things have changed, OSAP does not start to charge you interest until 6 months after you complete school. I am not sure what the interest rate is, but I have heard that it stinks.

[Guest Steve MD09]

OSAP starts accumulating interest as soon as you cease being a full time student, but you're not required to make payments until 6 months later. I've heard that the interest rate is generally prime + 2.5%, which is currently 8.5%. I find it unlikely that the interest is compounded daily (more likely monthly), although I don't really know as I've never had an OSAP loan before.

 

osap.gov.on.ca/eng/not_secure/repay.htm

[Guest aneliz]

OSAP accumulates interest the entire time... however, while you are a full time student, the government pays that interest for you. When you stop being a full time student, the interest that the loan accumulates ceases to be paid by the government. If you finished school in May, this means that as of June 1, the interest is going to be paid by you.

 

The current interest rate for OSAP is prime + 2.5% - which is 8.5% /month currently. You are not required to make any payments on your loan until 6 months after you graduate, however, the interest is accumulating during this time.

 

At the end of the six months 'grace period', the accumulated interest is 'capitalized' into your loan to create a consolidated loan amount that you have to repay. (Borrowed principal + 6 months accumulated interest + interest). And yes, the interest is compounded daily... so you can decrease the amount of interest that you pay by making bi-weekly payments or even weekly payments rather than monthly ones. (Anything you pay goes directly to pay interest that has accumulated since your last payment before being applied to the principal...more frequent payments = less interest accumulated = more of payment applied to principal)

 

If you have some $$, it is a good idea to make a lump sum payment during your grace period... to knock back some of hte principal and to start making payments before the end of the six months so that you are not paying interest on 6 months interest later....

[Guest Kirsteen]

Hi there,

 

Another suggestions re: student loan payments... If you're one of those folks who actually has some funds left in their line of credit then it's a good idea to use that towards paying down student loans or products with higher rates of interest, e.g., credit cards. I'm not sure how many people are in such a position but if you are...

 

Cheers,

Kirsteen

[Guest JewelLeigh]

Ahh...my mistake...apologies (And darn it...more interest stinks!)