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3 Times You Need a Loan Payoff Letter for Your Student Loans

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If you’re one of the roughly 45 million Americans carrying student loan debt, you’re likely aware of all the paperwork that comes with it. And a particularly useful document you may need as you repay your school debt is the student loan payoff letter.

If you’re looking to get a mortgage or refinance your debt, lending companies will likely ask you for a statement with your remaining loan balance. This is the student loan payoff letter, also known as a “payoff verification statement,” and it’s necessary for getting a loan or credit for big purchases.

Here’s some information on why the student loan payoff letter is such a big deal, when you’ll need it, and how you can get it.

What is a student loan payoff letter?

Your student loan payoff letter is generated by your loan servicer, whether you have federal or private student loans. It shows your payoff amount, your monthly bill obligation, and other important account information.

It’s different from your monthly statement, and it includes your “total payoff amount,” which — unlike your current balance — includes future interest costs based on when you plan to finish repayment.

You may need this student loan payoff letter to achieve such goals as buying a home or refinancing your student debt. Here are three such cases where a payoff letter could be required.

1. Getting a mortgage

When you want to buy a home and need a mortgage to finance your purchase, student debt can complicate the process and limit your options. In a National Board of Retailers survey, 83% of non-home owners said student debt held them back from buying a home.

When you start looking to buy a home, your debt-to-income (DTI) ratio plays a major role. Your DTI ratio is a calculation of your monthly debts compared to your gross income. Lenders look at it to determine whether you could afford your monthly payments if they gave you a mortgage loan.

Having student loans raises your DTI ratio and can make lenders nervous. A high student loan balance could restrict your loan options or ruin your chances of getting a mortgage at all.

When you apply for a mortgage with student loans, lenders may ask you to submit a payoff letter, the verification statement that shows how much you owe and what your monthly payment is. The lender can then use this information to help calculate your DTI, ultimately deciding whether to offer you a mortgage and at what interest rate.

2. Refinancing your debt

For borrowers looking to save money and take charge of their debt, refinancing your student loans can often make smart financial sense. Basically, refinancing replaces your current student loans and replaces them with a new loan, ideally at a lower interest rate. If approved for a lower rate, this can potentially save you a bundle, though refinancing has its drawbacks too.

In order to complete the refinancing process, you’ll generally need to contact your current lenders to request your student loan payoff letter/verification statement. As with a mortgage lender, the refinance lender will use this document to confirm the details of your student debt.

3. Paying off your loans

If you are ready to be debt-free and want to pay off your loan balance in full, you should also request a payoff balance from your loan servicer. As mentioned above, your monthly statement won’t necessarily include all the interest and fees you’ll owe if you pay off the rest of your remaining debt.

Note that the amount on the payoff letter is only valid for a specific time frame after your servicer issues it. If you pay the amount listed in the letter after the timeframe expires, you may have to make an additional payment later, once the interest charges are added on. It can be frustrating to think your debt is paid in full only to find you owe more money, and if you don’t realize you still have debt, you could end up delinquent on your loans.

How to get a payoff verification statement

To get a payoff letter, borrowers must contact their loan servicers and request it. The details vary by company — many online lenders allow you to request a payoff statement on their website, though some others may require a phone call or different method of contact.

Once you have the statement, share it with the lenders who are requesting it, including your mortgage company or refinancing lender. Be sure to keep a copy in your files for yourself as well.

Here is the information for obtaining a student loan payoff letter from three of the most common loans servicers:

American Education Services

  • Visit and enter your login information
  • Under “Account Summary,” select “Payments and Billing”
  • On the left, select “Loan Payoff”
  • Enter the date of when you want the loan paid off
  • Choose “Select a Payoff Quote”
  • Print or save the quote

Alternately, you can call AES at 1-800-233-0557.

Great Lakes

  • Visit and login
  • On the top navigation bar choose “Payments”
  • Select “Manage Payments”
  • Select “Calculate Payment Amount”
  • Use the “Choose Payoff Date” field to select the desired date
  • The site will bring up your 30-day payoff quote
  • Save or print the quote

Or you can call Great Lakes at 1-800-236-4300.

FedLoan Servicing (PHEAA)

  • Visit and login
  • Under “Account Summary,” click on “Payments & Billing”
  • Choose “Loan Payoff” on the left
  • Select the loan that you want to request a payoff quote for
  • Choose your date
  • Select “Request A Payoff Amount”
  • Save or print version of each page

Likewise, you can also phone this servicer at 1-800-699-2908.

Managing your loans

Handling your student loans when you’re trying to achieve your other financial goals can be difficult. Whether you’re looking to buy your first home or want to refinance your loans to save money, requesting a payoff letter is an essential first step.

For more information on managing your debt, check out our advice for paying off your student debt quickly.


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