Paying your federal loans off ahead of time

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sm54
Posts: 1
Joined: Mon Feb 22, 2010 11:09 pm

Paying your federal loans off ahead of time

Postby sm54 » Fri Jul 30, 2010 3:00 pm

If you happen to come across/save up a large chunk of money 2 or 3 years out of law school and have federal stafford loans out on a 10 year repayment schedule, can you entirely pay them off early? Any penalties?

theantiscalia
Posts: 320
Joined: Mon Mar 15, 2010 11:18 pm

Re: Paying your federal loans off ahead of time

Postby theantiscalia » Fri Jul 30, 2010 3:14 pm

No, you can repay it early without penalties.

You can even make extra payments (or increase the amount of your payments) over the life of the loan to reduce interest charges.

theantiscalia
Posts: 320
Joined: Mon Mar 15, 2010 11:18 pm

Re: Paying your federal loans off ahead of time

Postby theantiscalia » Fri Jul 30, 2010 3:14 pm

theantiscalia wrote:No, you can repay it early without penalties.

You can even make extra payments (or increase the amount of your payments) over the life of the loan to reduce interest charges.


In fact, if you make an extra $25, $50, or $100 payment each month, you can dramatically reduce the life of your loan.

Allitigator
Posts: 23
Joined: Thu Jul 29, 2010 11:49 pm

Re: Paying your federal loans off ahead of time

Postby Allitigator » Fri Jul 30, 2010 6:44 pm

If you set up automatic deductions from a bank account, the amount of the loan also goes down. Mind you that student debt is preferable over other types. Why pay it off in full, even if possible? Different people have varying tolerances for debt, but student debt, if you follow the guidelines, is an ideal debt to carry until circumstances say otherwise. Granted, no debt is the best option, but student debt comes close.




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