The economy is improving and the unemployment rate is hitting record lows which means interest rates on all sorts of loan products including student loans are inching up. With the Federal Reserve moving earlier this year to raise the cost of borrowing by 0.25 percent, lenders are reacting by upping the interest rates they charge on their loan products, and more rate increases are likely coming.
PNC, the Pittsburgh financial services company, lender, and bank, is the latest to join a growing list of lenders who are raising rates. With that being said, their private student loans are getting a little pricier according to LendEDU.
Take its undergraduate variable rate loans for starters. Toward the end of March, PNC was charging between 3.77 percent and 10.81 percent in interest on its private student loan product. That rate was increased to between 3.99 percent and 11.03 percent as of May 12. Even the low end of its fixed rate undergraduate student loan went up during the same time frame. It is currently at 6.26 percent to 12.99 percent; back in March, the lowest interest rate a borrower could get on a fixed undergraduate loan was 6.23 percent.
In an environment where interest rates are rising, variable rate loans, or those that fluctuate with the market, that see increases in interest, but fixed rate loans typically remain static though fixed rate offers are still subject to change. This means that a fixed rate on a disbursed loan’s interest rate cannot change, but the interest rate offer for the same product at a later date could change with the market.
With that being said, the graduate student loan from PNC saw an increase in its fixed rate offer. Back in March, borrowers would have to pay anywhere from 6.23 percent to 12.99 percent, and that rate increased to 6.26 percent to 12.99 percent as of the middle of May. It may not seem like a lot but any increase in the interest rate means less money in the bank. Alternately, the graduate variable rate loans interest rate remained the same between 3.77 percent and 10.81 percent. Healthcare professional student loans also increased from March to May with the fixed rate loans going from 6.23 percent to 12.99 percent to between 6.26 percent and 12.99 percent. The variable rate loan jumped to between 3.99 percent and 11.03 percent from 3.77 percent to 10.81 percent at the end of March.
Author: Dave Rathmanner
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