repaying your college loans?

[vtohthree]

So I'm about to get a subsidized government loan(DIRECT LOAN), the terms state for the standard repayment plan is a fixed monthly plan lasting up to 10 years.

Here's the question that I couldn't find the answer to on the site. Would they allow me to repay the loan back in say, one lump sum if I could after the 6 month grace period? As in, I don't want to wait 10 years and let interest build up on that sum with dinky little monthly payments if I was capable of laying down the whole amount in a month or two.

Those of you who graduated college(with loan debt) and were capable of doing this, know?

EDIT: Forget about it, I'll just sign the MPN's and contracts tommorow. Thanks though, to all who responded.

 

[Bucks]

I am pretty sure you can pay over the minimum about as much as you want. Kind of like a credit card...instead of paying the minimum you can pay it off

 

[vtohthree]

That's what I figured, and that's what I would hope. But, can someone confirm?

 

[PhoenixOrion]

Of course any loan can be paid in one lump sum or can be paid early and not go by the schedule for entire life of the loan.

The question is if there are penalties or fees associated with what you plan on doing.

The best route is to actually call their loan officer and ask these questions to protect you from any of these fees. Some student loans are configured that if you make a lump sum payment that they will try to allocate a higher percentage of the sum to pay upfront into the interest instead of the principal. Banks and loan companies have to make their money somehow.

 

[vtohthree]

Originally posted by: PhoenixOrion
Of course any loan can be paid in one lump sum or can be paid early and not go by the schedule for entire life of the loan.

The question is if there are penalties or fees associated with what you plan on doing.

The best route is to actually call their loan officer and ask these questions to protect you from any of these fees. Some student loans are configured that if you make a lump sum payment that they will try to allocate a higher percentage of the sum to pay upfront into the interest instead of the principal. Banks and loan companies have to make their money somehow.

Ah right, of course, I would certainly expect a private loaner(salliemae, citibank, etc) to charge such penalties and fees for paying it all off early. However, this is a "DIRECT LOAN" from the federal board of education. I was going to call, but its 3a.m. Eastern. and I'm currently in the process of signing the MPN for it, I guess this can wait until tommorow.

unless... someone's been in this situation..and can share?

 

[msparish]

Federal loans can be paid off immediatley. However, doing so isn't always the best idea. Interest rates are generally lower than what is found in the private sector (even though they have increased), and the interest is tax deductable. In addition, lenders will generally give 1-2% off of the interest rate automatically for timely payments and automatic payments. With all of these advantages, paying off a student loan immediatley isn't always the best financial decision. That said, you can pay it off at any time you want to.

 

[The Stigenator]

you know i hate sac.state, tehy dropped direct loan as a lender for stafford loans apparently.. what a load of bull, now i got to go thru a private company for teh loan.. BOA or whatever..

sucks i tell you, sucks balls.

 

[MajinWade]

Student loans are hell, avoid if you can. But yes, you can pay off the type of loan you describe anytime. If you have the paperwork, all the information should all be there.