The average daily balance on an educational loan?
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justis
Apprentice
Joined: 20 Nov 2004
Posts: 6
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 Posted: 04/20/08 - 05:19 Post subject: |
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| Hello everybody! My name is Darren and I would like to ask you something about educational loan. My son is about to go to college and we must take a loan in order to pay his tuition. We found the loan which applies average daily balance. Since I am not the economist, I would appreciate if some of you could tell me what does it mean to have the average daily balance on an educational loan? Thank you. |
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locke
Apprentice
Joined: 25 Dec 2006
Posts: 12
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| Posted: 05/19/08 - 23:26 Post subject: |
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| Hello Darren. First, let me congratulate you on your son’s going to college. You must be very excited. But, I know how expensive it can get. When it comes to your question, it is all about the method that lender is using when calculating various finance fees. Average daily balance is determined by two factors. Those are sum of transactions performed per day and number of days involved. When you divide those two, you get the average daily balance. To tell you the truth, I don’t think that this method will increase your payments in any case. So, you don’t need to worry about it. I wish all the best to you and your son. Take care! |
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