What is a payoff statement for student loans?

A payoff statement reveals how much you owe on your student loans, including your principal balance, interest charges, and any fees. If you were to pay off the total amount on your payoff statement, you’d bring your balance down to zero and close out your debt. 

Here’s a closer look at student loan payoff statements, including when you might need one and how to request it from your loan servicer. 

What is a payoff statement? 

A payoff statement, also known as a payoff quote or loan verification letter, details the amount it would cost to pay off your student loan in full.

The amount on your payoff statement may be higher than your student loan balance. That’s because your balance represents the principal amount you owe, but it may not include all your unpaid interest or loan fees. By contrast, your payoff statement will include interest charges and any fees your loan has accrued. 

If you want to refinance student loans, take out a mortgage, or pay off your student debt in full, you may need to request a payoff statement from your loan servicer.

What does a payoff statement include? 

Your payoff statement will show how much you currently owe on your student debt. Specifically, you’ll see the following information: 

• Payoff amount: This is the total amount you’d need to pay to get rid of your student loans in full. It will include your principal balance, unpaid interest, and any fees. 
• Interest charges: Your statement will detail how much outstanding interest you owe on your student loans. 
• Fees: You’ll also see any additional fees, such as late payment fees, that add to your payoff quote. 
• Good-until date: Your payoff statement is only good through a certain date, since the amount you owe will change as interest accrues on your loans. If you’re looking to pay off your student loans in full, make your lump-sum payment before the good-through date so you don’t end up owing more money due to interest. 

Related: How to pay off student loans: 10 strategies to be debt-free

When to request a payoff statement 

There are a few circumstances that might require you to get a copy of your student loan payoff statement. Here are the main scenarios: 

• To pay off your loan early: If you have the means to pay off your loan in full, you’ll need a payoff statement to see the exact amount you have to pay. If you only pay your balance, you might still have to cover outstanding interest charges before your loan is fully paid off. A payoff letter will show you the total balance, interest, and fees you must pay to close out the account completely. 
• To buy a home: Your mortgage provider may want to see your student loan payoff statement to see how much you owe. They may use this statement to calculate your debt-to-income ratio and ensure you can afford to pay off a mortgage on top of your student loans. 
• To refinance your loan: When you refinance student loans, your new lender pays off your old loan and issues a new one in its place. Your refinancing provider may request your payoff statement so it knows the exact amount it has to pay your previous creditor. 

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How to request a payoff statement 

You can request a payoff statement from your loan servicer or lender, depending on whether you have federal or private student loans. 

• Federal student loans: Contact your student loan servicer or sign in to your online account for a payoff statement. If you're not sure who services your federal student loans, find this information by signing in to your StudentAid.gov account and clicking “My Loan Servicers” on your dashboard.
• Private student loans: If you owe private student loans, you can usually download a payoff statement or access your payoff amount by logging into your online account. If not, contact your lender or loan servicer directly. You can find your loan provider on your student loan statements or your credit report, which you can request for free at AnnualCreditReport.com.

Advantages of an early payoff 

If you can afford it, there are several advantages to paying off your student loans ahead of schedule. Here are some ways that an early student loan payoff could boost your finances: 

• Save money on interest: The longer you’re in debt, the more you’ll pay in interest. Paying back your student loans early could save you hundreds or even thousands of dollars in interest charges. 
• Reduce your debt-to-income ratio (DTI): Having a high DTI can make it difficult to qualify for a mortgage or other type of loan. By getting rid of your student loan debt, you’ll lower your DTI and make yourself a stronger candidate for a loan. 
• Free up monthly cash flow: If you no longer have to make student loan payments every month, you’ll have more room in your budget for other financial priorities. 
• No prepayment penalties: There are generally no fees for paying off a student loan early, so you don’t have to worry that doing so will increase your loan costs. 

Disadvantages of an early payoff 

Be sure to consider the whole picture of your finances to determine whether paying off your student loans in full is the best move for you. Here are some potential downsides: 

• Potential financial risk: Paying off your loans early may not make sense if you’re using funds from your emergency savings, taking out another high-interest loan, or neglecting higher-priority debts like credit card balances or loans with higher interest rates. 
• You won’t be eligible for federal forgiveness: For borrowers with federal student loans, early repayment could mean missing out on significant benefits like Public Service Loan Forgiveness or forgiveness through Income-Driven Repayment (IDR). 
• You’ll lose out on tax advantages: By paying off your loans early, you’ll forfeit the opportunity to deduct up to $2,500 in student loan interest on your taxes annually.