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Paying your federal loans off ahead of time
Posted: Fri Jul 30, 2010 3:00 pm
by sm54
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?
Re: Paying your federal loans off ahead of time
Posted: Fri Jul 30, 2010 3:14 pm
by thebookcollector
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.
Re: Paying your federal loans off ahead of time
Posted: Fri Jul 30, 2010 3:14 pm
by thebookcollector
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.
Re: Paying your federal loans off ahead of time
Posted: Fri Jul 30, 2010 6:44 pm
by Allitigator
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.