If you have already accepted more loan money than you need, the proper action is to contact your school's financial aid office to return the excess funds. Returning the unused loan money reduces your total loan debt and can save you money on interest over the life of the loan. For federal student loans, you generally have up to 120 days from when the funds were disbursed to return the excess amount without being charged interest or fees. For private loans, contact your loan servicer promptly to arrange the return and find out the specific process.
Steps to Take
- Contact your school’s financial aid office about returning the excess loan money.
- Notify your loan servicer (for private loans) to get instructions on how to repay the unused funds.
- Return unused federal loan funds within 120 days of disbursement to avoid interest charges.
- Keep records of any communications and repayments made to ensure your loan balance is correctly adjusted.
Returning loan money you do not need is a responsible financial decision because it reduces both your debt and the interest you will owe in the future.
