What is a 10-Day Loan Payoff?

Most consumers know about the benefits of refinancing student loans – namely, a lower interest rate, lower monthly payment or shortened repayment timeline – but they may not have a full understanding of how student loan refinancing actually works.

It’s not necessary to learn the ins and outs of the lending industry in order to benefit from student loan refinancing, but it can help to have some general knowledge about how your loan is handled. This is especially true when it comes to the “10-day loan payoff,” which refers to how your loan is transferred from one lender to another.

Here’s what you need to know about this concept, and how it’s relevant to your responsibilities as a borrower.

How the 10-Day Loan Payoff Works

Refinancing a loan usually involves leaving your current lender for a new one. When that happens, the new lender is responsible for paying off your loan balance to the old lender. This usually takes several days, partly because there’s a three-day cooling-off period during which time you can cancel the refinance. Interest continues to accrue on the loan during this period.

Once this cooling-off period is over, the new lender is ready to pay off the loan to the old lender. Before that begins, they need to know the exact loan balance, and calculating it can take some time.

Why Is it Called a 10-Day Loan Payoff?

When the new lender sends the final payoff check to the old lender, the amount sent is known as a “10-day loan payoff.” This name refers to the fact that it often takes 10 days for the refinancing to go through completely. This 10-day loan payoff amount will be different than how much is currently left on the loan because it includes any future interest due.

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Finding Your Final Loan Payoff Amount

Your new lender will ask you to figure out the 10-day final loan payoff amount owed to the old lender. You’ll have to contact the old lender and ask them what the amount will be. Because interest accrues on a daily basis, the 10-day loan payoff amount will only be accurate up to a certain point, known as the “good-until date.” After that date, the payoff amount will change because the interest accrual will be different.

Depending on the lender, you may be able to reach out via email or online chat to find out your 10-day loan payoff amount. If not, you’ll have to call and ask.

More Information Your Lender May Need

The new lender will also need to know your account number with the old lender. You can usually find this number on a monthly statement or official document. Make sure to relay this number accurately. If you provide the wrong number, the payoff check may take longer to appear on your account.

You may also need to provide the loan number, which is different from the account number. If you’re refinancing multiple loans, you must provide each individual loan number to the new lender. If you’re not refinancing all the student loans, make sure you specify that to your new lender.

Sometimes lenders will allow electronic payments, but many still use paper checks. If the old lender only accepts checks, that means the new lender will have to mail the payoff amount. You’ll also be responsible for locating and providing the old lender’s mailing address. Don’t just assume it’s the same address you see on your billing statement or on their website.

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Contact them directly and ask for the correct address to send the payoff amount to, then accurately relay this information to the new lender.

If you give them the wrong address, it’s possible that the check may be lost. If this happens, the check will need to be voided. This will also likely result in a different 10-day loan payoff amount, so you’ll have to call and get that figure again from the old lender.

Benefits of Refinancing Your Student Loans with ELFI

There are two possible benefits to refinancing a student loan. The first is a lower interest rate and less interest paid in total. The second is a lower monthly payment allowing for more flexibility in your budget.

Sometimes borrowers will choose to shorten their repayment term in order to pay off the loan faster. This may result in the same monthly payment as before or an even higher payment, but it also means less interest paid over the life of the loan.

Why Refinance With ELFI?

When you apply to refinance your student loan with ELFI, you can choose whichever repayment term makes more sense for your budget. Both parents and students can refinance their loans with ELFI. Refinance terms range from five to 20 years for students and five to 10 years for parents.2

When you apply to refinance your student loans, you’ll be assigned a Personal Loan Advisor to answer your questions, explain the terms and finalize your refinance.

ELFI does not charge any application, origination or prepayment fees. You may be able to use a cosigner on your loan application to improve your chances of being approved. If you already have a private student loan with a cosigner, you may be able to refinance with ELFI to remove them from the loan.

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ELFI has competitive rates, with variable-rate loans starting at 2.39% APR** and fixed-rate loans starting at 2.79% APR.** The final interest rate will vary depending on your credit score and income.

ELFI has a 4.9 rating on Trustpilot with more than 1,300 reviews and an A+ rating from the Better Business Bureau.3 Don’t miss what our customers are saying about us here.

This website is for educational and informational purposes only and should not be construed as legal, financial or tax advice. Links to other websites or references to services or applications are provided as a convenience only. A link does not imply ELFI’s sponsorship or approval of any other site, service or application. ELFI does not control the content of these sites, services or applications.

*Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions.

**APR = Annual Percentage Rate. Interest rates current as of 11-13-2020. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. See Eligibility Requirements for more information.

2For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.10 per $1,000 borrowed. Rates are subject to change.

3Trustpilot and Better Business Bureau ratings accurate as of 1/26/2021.