Unless you instruct us otherwise, until your loan is fully disbursed (sent to your school) and enters repayment, if
you make a payment within 120 days of when a loan is disbursed, the payment will be applied directly to your original
principal balance. These payments are considered a partial or full cancellation of the loan. Making payments in this
way will reduce the total amount you owe and may reduce outstanding accrued interest and fees assessed at the time the
loan was disbursed.
If before your loan is fully disbursed and repayment begins, you want to have a payment applied as a standard
payment, submit your request in writing or send a secure message.
Once fully disbursed, your loan enters repayment and payments will be applied as a standard payment, applying first
to interest and then principal once all outstanding interest is paid.
After your loan is fully disbursed and enters repayment, if you want a payment that you made within 120 days of the
final disbursement applied as a cancellation, submit your request in writing or send a
secure message. Keep in mind that cancellation payments do not satisfy bills. To
prevent yourself from becoming past due, make standard payments for any required monthly payments that are due.
Note: Transactions applied as a cancellation of the loan reflect differently on your payment
history. The posted date is the date the payment posts to your account. The effective date is backdated to the date
the loan was disbursed.
When it’s time for you to begin repaying your loan, you can save time and ensure your scheduled monthly payments are made
on time by setting up Auto Debit. Applying and being approved by MOHELA for scheduled automatic payments to be electronically
debited from your banking institution may qualify you for a 0.25% interest rate reduction. Not all lenders offer the 0.25%
interest rate reduction (subject to conditions). Until payments are required, payments may be made at any time online, by
mail, or by phone.