Are there prepayment penalties on Stafford loans? | 05.26.09
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 principal balance of the loan(s).
There is NEVER a penalty for prepaying principal 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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As a major provider of loans, it’s pathetic that you cannot correctly distinguish between principle and principal.
You should really proof your site.
Thanks for catching that. Some of these older posts could have used more proofreading!