Wall Street has also been churning out private prepaid variable forward deals.

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Rates on most private student loans are variable.

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Private student loans often carry uncapped, variable interest rates and aren't required to include flexible repayment options.

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Asher cautions against taking out private loans, however, which usually have variable rates, and interest begins accumulating right away.

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Comparing variable-rate loans can be tricky because some private student lenders tie rates to the prime rate while others use the one-month or three-month London interbank offered rate, or Libor.

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Mark Harris, chief executive of mortgage broker SPF Private Clients, explained that most mortgages track a lender's standard variable rate, or the base rate, so most are not directly affected by Libor.

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