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Is it possible, or allowed, to pay back a stafford, perkins, or gradplus loan before interest starts to accrue?

Basically, could I immediately pay back whatever loan I take out before interest starts (so I would be paying back whatever I took out)? Or are there stipulations in these loans that prevent such rapid repayment, or prevent such repayment without penalty fees?

Also, what does a graduation fee mean? Like the stafford has a 1% graduation fee, what the heck is that?

Of course.


EDIT: Not sure about the graduation fee.

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quadsixm wrote:No prepayment penalty, although they do take some fees off the top in the beginning, so it's not a free loan.

thederangedwang wrote:Is it possible, or allowed, to pay back a stafford, perkins, or gradplus loan before interest starts to accrue?

Basically, could I immediately pay back whatever loan I take out before interest starts (so I would be paying back whatever I took out)? Or are there stipulations in these loans that prevent such rapid repayment, or prevent such repayment without penalty fees?

Also, what does a graduation fee mean? Like the stafford has a 1% graduation fee, what the heck is that?

Correct me if im wrong

but perkins does not have this up front fee right? I know gradplus does have this fee. Im not sure about stafford.

Not sure about perkins, but my stafford did have a fee taken out up front.

thederangedwang wrote:

quadsixm wrote:No prepayment penalty, although they do take some fees off the top in the beginning, so it's not a free loan.

thederangedwang wrote:Is it possible, or allowed, to pay back a stafford, perkins, or gradplus loan before interest starts to accrue?

Basically, could I immediately pay back whatever loan I take out before interest starts (so I would be paying back whatever I took out)? Or are there stipulations in these loans that prevent such rapid repayment, or prevent such repayment without penalty fees?

Also, what does a graduation fee mean? Like the stafford has a 1% graduation fee, what the heck is that?

Correct me if im wrong

but perkins does not have this up front fee right? I know gradplus does have this fee. Im not sure about stafford.

not trying to be nit picky but once your loans are disbursed, interest will start to accrue on the loans (gradplus, unsubsidized stafford). Therefore, you can only cancel the loan before disbursement to avoid paying interest (not sure about the fees). As others mentioned, there is no prepayment penalty in repaying the loans, so you can repay as quickly as you would like.

Question - if you're able to pay the loan off immediately then why do you need it in the first place?

In UG I qualified for subsidized staffords (Govt pays the interest until you graduate) and one year where I didn't actually need the money I briefly considered taking them out anyway, investing the money, and just paying it back when I graduated. It could have resulted in collecting investment earnings while the government paid the interest, but in hindsight given how bad the stock market was while I was in UG it was a good idea not to.