Usually a student loan won't have to be repaid until the student graduates and has finished his or her schooling. This will allow the student to concentrate on studying and not be concerned about any kind of repayment plan.

After the graduate finishes his or her studies, the student loan rates will be an important factor since the graduate will be starting a new job, possibly finding new accommodation, and have travel and living costs to cover as well. Every cent will count in the beginning and even a difference of one percent in the repayment plan will have an effect on one's living standards.

Some lending institutions charge fees to set up a student loan, and this is one factor that can increase the cost of the loan. Often a lender will offer a low interest rate that seems very competitive, but these low rates are often offset or can actually cost more due to the fees that are charged. On the other hand lenders that don't charge the fees will roll over the costs into the student loan interest rate. As a general rule of thumb, three to four percent in fees is about the same as a one percent higher interest rate.

Be sure to check to see if the student loan interest rate is fixed or variable, because a fixed loan may be more expensive than a variable rate at the time of application but if the variable rates are to rise in the future then the fixed loan would have been the best option.