Early repayment of a Subsidized Stafford Loan...?

External Since: Aug 05, 2005 Posts: 1

Hi,
I'm in school full-time, next spring I'll be finished and my Stafford
loan will enter repayment 6 months after that. I haven't borrowed
much (2625$) and I have a "somewhat" stable source of income now. I'd
like to send the bank my extra money and (hopefully) pay off the
entire loan before it even enters repayment. I know there is no
penalty for early repayment but:

1.) Since the loan is subsidized (government covering interest while
I'm in school), does this mean that if I pay the entire thing off
before repayment is "officially due" I owe NO interest at all (I just
have to pay back the 2625$)?

2.) If I send a payment to the bank now will they "automatically" put
the loan into repayment and expect me to continue sending them money
(and start charging me interest)?

Thanks,
~Mike

External Since: Aug 18, 2005 Posts: 3

call the folks and get a 'payoff ammount' it will probably be higher
than the $2500.00. Send them a cashier's check and ask for a payoff
letter (takes about 30 days).

Not a big deal. Do it while you have the cash so you can forget about
it.