Glossary

Annual Percentage Rate (APR)
A loan's Annual Percentage Rate, or APR, is what credit costs you each year, expressed as a percentage of the loan amount.

Applicants
Applicants are either a student, a cosigner, or both together, who are applying for a private student loan.

Capitalization
This occurs when interest on your loan accrues and is periodically added to the principal. Capitalization increases your balance due. Interest is charged on the new balance, including both the principal and unpaid interest. This may increase your monthly payments on a loan. Capitalization is also called compounding.

Cosigner
A cosigner is an additional applicant, such as a parent, guardian, grandparent or other person added to the loan who will bear the same legal responsibility as the student. Adding a cosigner with good credit history may improve chances of passing the initial credit review and may help lower loan rates.

Credit Agreement
The Credit Agreement is a legally binding contract that outlines the terms and conditions of your loan and repayment obligations.

EasyInvite℠
The EasyInvite℠ tool allows you to easily add someone else, a student or cosigner as applicable, to your application. When you get to his/her appropriate section of the application, simply select the EasyInvite℠ option and provide his/her e-mail address; an e-mail containing detailed instructions and a link to your application will be sent to him/her so (s)he can enter his/her personal information. Please note that (s)he will need to provide the confirmation number and answer the 3 'shared secrets' that you have created. For security reasons, we can't send your 'shared secrets' in the e-mail, so you will need to contact him/her to share your 'secrets.'

Interest
A fee, usually a percentage of the loan amount, that is charged in exchange for lending the money. If the interest rate (the percentage) stays the same for the term of the loan, it's called a fixed rate. If it changes periodically, for example, each year, it's called a variable rate.

Interest Rate
The percentage rate that is used to calculate the amount of accrued interest. The rate can be fixed, meaning it stays the same over time, or variable, meaning it can adjust up or down over time. The variable rate is the sum of two figures, (Index and Margin). An example would be the variable One-month LIBOR index (see 'One-month LIBOR') + 5.0% margin (see 'Margin').

Margin
When calculating the interest rate on a variable rate loan, a margin represents any additional percentage point(s) that will be added to the index to form the overall interest rate. If you were using One-month LIBOR as the interest Index and a loan had an interest rate of One-month LIBOR + 5.0%, then the 5.0% would be considered the margin.

 One-month LIBOR
LIBOR stands for London InterBank Offered Rate. For loans with variable interest rates, the rate is tied to One-month LIBOR as published in the "Money Rates" section of The Wall Street Journal (Eastern Edition). If you select the Variable Interest Rate type, your variable interest rate will be calculated by adding the current One-month LIBOR (captured on the 25th day of each month, or the next business day thereafter, of the month immediately preceding such calendar month and rounded up to the nearest 1/8th of one percent) index to your margin. For loans with variable interest rates the variable interest rate and Annual Percentage Rate (APR) may be higher depending upon your, or your cosigner's, credit history and will increase or decrease if the One-month LIBOR index changes.

Origination Fee
The lender's fee for services provided in connection with the origination and funding of the loan to you. For applications received on or after 11/23/2011 there are no Origination Fees on the Collegiate Custom Choice Loan Program.

Principal
The full amount of the loan borrowed before interest is charged. If you borrow $10,000 your initial principal balance is $10,000.

School Certified
School certified loans are private student loans that are disbursed directly to the schools. Pertinent loan request information is sent to your school's Financial Aid office to be "certified" to verify that the amount of the loan is appropriate based on your tuition cost less your financial aid package. Once your loan amount is certified, your funds will be disbursed directly to your school on the dates set by your school.

Student
The student is the applicant who is attending school.