---
kind: "section"
citation: "7 C.F.R. § 766.120"
title: "7"
number: "766.120"
heading: "Extending maturity date and installment schedule for direct loans with a balloon payment."
url: "https://uscodex.org/cfr/7/766.120"
---

# §766.120. Extending maturity date and installment schedule for direct loans with a balloon payment.

- (a) At a borrower's written request, the maturity date and installment schedule of a direct term loan with a balloon payment may be extended for up to an additional 8 years from the original maturity date using an addendum to the promissory note when the:
  - (1) Loan was originally amortized for no more than 15 years with a balloon payment scheduled in the final year of the loan;
  - (2) Loan has not received PLS, DBSA, or DSA;
  - (3) Borrower has made all scheduled loan installments in the last 36 months;
  - (4) Balloon payment is due in less than 12 months;
  - (5) Borrower does not have an outstanding DBSA or DSA on any loan;
  - (6) Borrower has not received PLS on any loan in the last 36 months;
  - (7) Borrower has only had equal installments scheduled on any direct term loan in the last 36 months;
  - (8) Borrower's direct loans are fully secured with each loan having a security value of at least 100 percent of the remaining balance of the loan;
  - (9) Borrower is unable to partially or fully graduate;
  - (10) Borrower has acted in good faith;
  - (11) Borrower is not otherwise financially distressed or delinquent;
  - (12) Borrower must pay a portion of the interest due on the loan; and
  - (13) **Addendum is signed by the borrower before the original maturity date.**
- (b) In no event may the loan exceed applicable term limits described in this part.

## Notes

### Amendments

[89 FR 65045, Aug. 8, 2024]

### Authority

Authority: 5 U.S.C. 301, 7 U.S.C. 1989, and 1981d(c).

### Source

Source: 72 FR 63316, Nov. 8, 2007, unless otherwise noted.

### Amendments

[89 FR 65045, Aug. 8, 2024]