05.26.09 | Are there prepayment penalties on Stafford loans?
A prepayment, as most of you know, is an amount in excess of the amount due on the loan. And like all other federal student loan payments, a prepayment will first be applied to any outstanding fees and charges, next to outstanding interest, and then finally to the principle balance of the loan(s).
There is NEVER a penalty for prepaying principle on any federal student loans.
Additional note: If you have more than one federal student loan with the same servicer, you must specify which loan you are prepaying down.
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Filed under: Repayment
