Can I Repay Student Loans When It Is Not Time To? Plz Respond Many Responses Needed As Possible!?
November 5, 2010 by admin
Filed under Student loans
I was wondering if it would be ok to put a little payment towards Student loans that I already have to decrease the amount of what I have to pay when im finally done with school? I know each year I pile on more debt but my thinking is, if i can pay off some debt and decrease my total amount I would have to pay overall I would be a little bit better off when compared to not paying anything and let the debt just pile and pile without no decrease in amount? I asked a person from fincial aid at my school and they said that it would be like “pandara’s box” and if i send a payment they will keep contacting me about making another. So what are your thoughts?
Yes you can, and sounds like a great idea.
Yes, you can make payments on your fedearl student and most private loans as well while you are in school. I am assuming you are referring to federal student loans. That is one of the advantages of taking out federal student loans, you can make prepayments without any penalty. There is also no penalty for early payoff of your loans. You will not be opening a pandoras box by making payments while you’re in school. Unless you want a monthly or quarterly statement from the lender, you don’t even need permission to do it. Just send your payment (in any amount you want) to the lender and they will apply it to your account.
I would suggest you contact your lender and ask them how much you owe and find out if you have Subsidized Stafford Loans and/or Unsubsidized Stafford Loans. Your Unsub loans will accrue interest while you’re in school, while your Sub loans do not. This will alert you to how your payemnts will be applied to your account. Payments get applied to interest first, then principal unless you indicate otherwise on your check or a note. Since making payments while you are in school is totally voluntary, there are no formal agreements; no monthly invoices, no statements unless you ask for one. I would suggest asking for a quarterly statement just to periodically compare the payments you made to the payments applied to your account. Also since it is voluntary you do not have to be consistent. You can make a payment this month and skip the next month or two or three and there is no penalty. You may when you want to. You can make one payment and never make another one until you graduate. It does not count against you because it is not mandatory while you are in school and in your 6-month grace period.
Lenders don’t care if you make payments in school or not. When you graduate, you have to make payments; either way they get their money. Making payments benefit you by keeping your balance down. Sorry I’m giving you so much information but I used to work at a student loan lender.
Yes absolutely!!
The only time I would not recommend this is if all your loans are subsidized. Those do not accrue interest while you are in school, so you’d be better off to take what you would have paid and put it in a bank account and let it gain some interest. Then right before the loan comes due (which is when the interest starts) clean out that bank account and put it all towards the loan.
If any of your loans are accruing interest now, it’s a great idea to give a little bit now if you can. It will save you money in the long run, and if they contact you just say, “I am still in school and still on deferment. ” What’s an annoying phone call or three if you’re saving money?