Student loan repayment plans?
If I were to take out a student loan that defers principal and interest until after I graduate, would I be able to pay off the loan in one payment so that I won’t have to deal with interest? It may seem like a dumb thing to do. You might ask why I would take out a loan to pay for college if I can afford it myself, but there is time value of money. By putting what money I save from the loan in something that earns me interest, at the end of my 4 years in college, I will have extra money from the interest earned, then pay back the loan in 1 payment without any extra interest. Would this work, or can I not pay the loan off in 1 payment?
There is no prepayment penalty on federal student loans, but unless you have a subsidized Stafford loan (which is need-based), interest will accrue while you are in school.
