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Jan
28
Posted on 28-01-2010
Filed Under (Student Loans) by The Bursar on 28-01-2010
La8elleDame5ansMerci asked:
I am considering taking out a Stafford Loan to pay for my college classes this semester. Ideally, I would like to take out the loan and pay it off by the end of the semester. Does the Stafford Loan allow you pay on it before the loan enters repayment? Also, how badly does the interest rate affect the amount that I pay back if the loan isn’t paid off over the next 10 years but over the next 5 or 6 months?
I am considering taking out a Stafford Loan to pay for my college classes this semester. Ideally, I would like to take out the loan and pay it off by the end of the semester. Does the Stafford Loan allow you pay on it before the loan enters repayment? Also, how badly does the interest rate affect the amount that I pay back if the loan isn’t paid off over the next 10 years but over the next 5 or 6 months?
Comments
Financial Aid Fred on 30 January, 2010 at 4:31 pm #
Yes you can pay back your Stafford loan while you are in school and before you enter the mandatory repayment phase. And the interest rate is fixed, so it won’t change based on if you pay it back in 5-6 months vs. the 10 year maximum.
The only question is why? Why are you taking out a loan if you are only going to pay it back in 5-6 months? If you can afford to, I would suggest just paying the balance due to your school and not taking out the loan.
If you have to take out the loan to cover the balance for a few months, then fine. But no sense in taking on debt only to pay it back so quickly if you do not have to.
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