Students and small business owners should check their mortgage information for loan interest and fees and compare interest rates with other lenders and loan servicing firms, the Federal Government’s new Student Loans Bureau has warned.
The bureau’s annual report on student loan interest rates, published today, said consumers should be concerned about the interest rates charged by some lenders and be aware that loan servicing charges vary from company to company.
“The interest rates that consumers may pay on their loans may vary from loan servicer to loan serverer,” the report said.
It said it would be “very helpful” for students to check their loans to find out what interest rates they are charged on their loan and if they are eligible for loan repayment assistance.
Students can also check the rates on other financial aid packages.
Bureau director Michelle Gaffney said the bureau was “looking at ways” to improve loan servicing and ensure consumers could make an informed decision about whether or not to take out a loan.
Ms Gaffley said consumers could look at some of the different terms of loans, including: 1) loan terms that do not provide an annual fee; 2) loan conditions that provide for a grace period; 3) loan amounts that vary according to loan type; 4) loan interest rate that varies by loan type and lender; and 5) loan repayment information and rates.
She said consumers also could check the information provided on some loan repayment forms to determine whether they could be eligible for a loan repayment package.
As part of the new system, the bureau said it was looking at “more direct and easier-to-use options for consumers” and would consider options for a streamlined loan servicing process.
Mr Dickson, who works for an independent credit advice company, said he was concerned about what loan servicing fees would be charged by loan servicing companies.
He said he did not know if the bureau would be able to track all of the fees charged by lenders.
This means that he could only assess the costs of servicing his loans and do not know how much interest rates are charged by the lenders, he said.
“I would like to know exactly what is happening, I am not in the position to make that determination.
I have a number of mortgages and I have the option to go to a third party to make an assessment of whether or the amount of interest they charge is reasonable.”
He said the fees he paid on his loans did not include any interest on the interest rate.
“It is not in my power to assess interest rates,” he said of his interest rate payment.
Many consumers will be able check the interest on their own loans, Mr Dickson said.
He said some lenders charged a lot of interest rates for the same amount of loan.
“That is why it is very important that we understand the costs associated with servicing loans.”
He would like a consumer to be able see the fees associated with the loan that they are interested in, he added.
A spokeswoman for the bureau told The Sunday Telegraph the bureau did not have any statistics on interest rates.