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What is a Payoff Statement for Student Loans?

A student loan payoff statement details the total amount you must pay to completely satisfy the loan.

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By Emily Guy Birken

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Emily Guy Birken

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Emily Guy Birken is a Credible authority on student loans and personal finance. Her work has been featured by Forbes, Kiplinger's, Huffington Post, MSN Money, and The Washington Post online.

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Edited by Renee Fleck

Written by

Renee Fleck

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Renee Fleck is a student loans editor with over five years of experience in digital content editing. Her work has been featured in Fast Company, Morning Brew, and Sidebar.io, among other online publications. She is fluent in Spanish and French and enjoys traveling to new places.

Updated January 30, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances.

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Credible takeaways

  • A payoff statement is a document that outlines the total amount needed to pay off your loan in full at a given time. 
  • The amount listed on your payoff statement will be different from your current loan balance.
  • You might need a payoff statement if you want to pay off your loan in full, refinance, or obtain a new loan.

If you have the financial means to completely pay off your student loans, your next step would be to contact your loan servicer for a payoff statement. This document outlines the total amount you would need to pay to completely satisfy your loan, including any unpaid interest. This guide will explain what a payoff statement is for student loans, and when you might need one. 

What is a payoff statement?

A payoff statement is a short-term document that outlines your principal balance, the amount of interest that has accrued since your last statement, and the total amount of money you would need to pay immediately to completely satisfy your student loan debt. 

There are several situations where you might need a payoff statement for your student loans, including:

  • Paying off your loan early: Since your payoff amount includes unpaid interest or accrued fees, you can request a payoff statement if you want to pay off your student loans early. That way, you can make the full payment to pay off the loan without having leftover interest you will need to pay the next month.
  • Refinancing your loan: When you refinance student loans, your new lender may ask you for a payoff statement from your current lender to know the exact amount needed to satisfy the debt.
  • Buying a home: As part of the approval process for a mortgage, your mortgage lender may request a student loan payoff statement. That’s because the lender will be reviewing all aspects of your finances, including your debt. Your student loan payoff statement will help the lender calculate your debt-to-income ratio (DTI).
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Important:

Refinancing your student loans can potentially save you money by reducing your interest rate. However, refinancing federal loans means you'd lose benefits like income-driven repayment and loan forgiveness.

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What's included in a payoff statement?

Your payoff statement will provide you with detailed instructions on how to pay off your student loan. Here is the specific information you can expect to find in a payoff statement:

1. Payoff amount

This is the amount of money you will pay to completely satisfy your student loan debt. The payoff amount includes several sections:

  • Outstanding balance: This is the amount you currently owe, including any newly added interest. Your principal balance is based on the original amount of money you borrowed, plus any accumulated interest.
  • Accrued interest: Interest accrues on your loan each month. Any unpaid interest must be paid in order to pay off your student loan completely.
  • Any incurred fees: If you have any unpaid fees on your student loan, this amount will also show up on your payoff statement. 

Keep in mind that the amount listed in your payoff statement won’t be the same as your current loan balance because it includes interest accrued through the day you pay off the loan. 

2. Good-until date

Since the specific amount you need to remit to pay off your loan changes as interest accrues, your payoff statement will provide a “good-until date.” After that date has passed, the payoff statement will no longer be accurate, since new interest will have accrued.

Your payoff statement may also list this as your “good-through date.”

3. Interest charges

Any interest that has accrued since your last payment will also need to be paid off. The payoff statement will tell you the exact amount of your accrued interest.

Related: What Increases Your Total Student Loan Balance

How to get a payoff statement 

Here’s how to find your payoff statement for federal and private student loan lenders:

Federal student loans

Your loan servicer will provide your payoff statement upon request. You’ll need to either navigate to your loan servicer’s website or call them directly to request the statement. 

If you’re not sure who your loan servicer is, visit your Student Aid dashboard and scroll down to the “My Loan Servicers” section. You can also call the Federal Student Aid Information Center at 1-800-433-3243. 

Private student loans

Many private lenders let you download payoff statements directly from their online portal. If that option isn’t available to you, call your lender directly to request a copy. It’s also a good idea to keep a copy of your payoff statement in case you need to verify any of the information later.

Read More: How to Find Your Student Loan Balance

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Why pay off your student loans early?

If you have the financial means to pay off your student loans with a single lump payment, it can offer your finances a major boost. There are several major benefits to paying off loans early.

  • Saving money on interest
  • Freeing up money in your monthly budget
  • Lowering your debt-to-income ratio

If you’re carrying multiple loans, it can be difficult to determine which to pay off first. If you prioritize the loan with the highest interest rate, that can save you money over the course of your debt payoff journey. But if you start with the loan with the lowest balance first, that could give you the psychological boost you need to keep going. It may also be easier to afford the payoff amount for your lowest balance loan.

No matter which method you choose, paying off your student loan debt can help your bottom line.

Meet the expert:
Emily Guy Birken

Emily Guy Birken is a Credible authority on student loans and personal finance. Her work has been featured by Forbes, Kiplinger's, Huffington Post, MSN Money, and The Washington Post online.

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