Take note of the terms and conditions which include:

• The amount you are borrowing
• Interest rate and fees associated with the loan
• Length of the repayment period
• Amount of and conditions under which late fees are accessed.

Here's a rundown of terms and conditions you will need to understand:

Disclosure statement

Your disclosure statement does just that — discloses the specifics of your loan. It includes the interest rate, the repayment schedule, the number of monthly payments you'll need to make to pay the loan in full, the amount(s) of your payments, and the estimated amount that you will repay — principal and interest — if you follow the schedule in the disclosure.

Repayment options

The most common repayment plan is to pay the same amount monthly for the duration of the loan. But most lenders offer you more than one way to repay, including extended or income-sensitive repayment schedules.

The repayment plan you choose impacts the total amount you repay.

Accrued interest

As you know, you will pay back the amount you borrowed with interest. Accrued interest is the interest that accumulates on the unpaid principal balance of a loan.

Capitalized interest

Unless you qualify for an interest subsidy, interest will continue to accrue when you are in a deferred payment status.

You have two options: You can make interest-only payments or have the interest capitalized when you resume repayments. Use College Answer's Accrued Interest Calculator to help analyze your options.

Collection

If you don't repay your loan on time in the amount you've agreed to, you will get calls and letters from your lender or servicer. Talk to your student loan servicer — they may be able to help you if you're having financial troubles.

Late charge

If you fail to pay all or a portion of a required installment payment when due, a late charge may be assessed.

Change of status

You must notify your lender or servicer when you change your name, mailing address, email address, or phone number — or if you leave school or drop below half-time status.

Default

The terms of your loan hold you to repaying the loan in full. Failure to pay — defaulting — can have significant impact on your credit rating and, subsequently, your ability to purchase a car or house and qualify for a credit card.