It may not be the best decision to overpay your student loan bill, even if it’s helping you avoid interest.

In the past six weeks, borrowers with federal student loans prepaid $10.8 billion worth of debt ahead of the restart of payments due in October, Treasury Department data show.

But, even if you’re among the fortunate few who used the three-year paused on required debt payments to stockpile savings, financial advisers say it may not be the wisest choice to pay down a meaningful chunk of your loans.

“With the economy's future uncertain, maintaining a balance between loan repayment, investment and savings becomes even more crucial,” said Leyder Murillo, managing director at Wolfpack Wealth Management in Denver.

Being debt free has its perks, but it depends on your situation. Below are the pros and cons, according to experts.

If considering a loan payoff, look first at your savings and cash flow to determine what you can afford.

“If making a large payment means depleting your emergency fund, think again,” said Kelly Palmer, founder of Wealthy Parent in Chicago.

Experts typically recommend keeping three to six months of living expenses in cash or a cash-like product. But with potential economic trouble ahead, some are advising to boost that to nine to 12 months.

Next, take note of the interest rate on your loans, which can range from 2.75% to 8.5% on debt issued since 2006. If your interest rate is on the higher side, there’s a stronger case for paying off a large chunk of the debt, Palmer said. It could save you thousands, depending on how much you owe. But be sure you don’t also have another loan or a credit card balance with an even higher rate. You should prioritize that first.

Should you decide you’re in a position to make a payment, see if your loans aren’t yet consolidated and you can put your payment toward the loan with the highest interest rate.

Then, if you’re looking to lower your monthly bill, contact your loan servicer and ask to “redisclose” your loan, said Betsy Mayotte, president at the Institute of Student Loan Advisors.

That will recalculate how much you need to pay each month to repay your debt in full by the end of the loan term. Otherwise, your next bill’s due date will just be pushed into the future by the number of months your payment covered, said Jan Miller, president of Miller Student Loan Consulting.

Perhaps the most important consideration for paying off a large portion of your debt is your eligibility for forgiveness.

The Public Service Loan Forgiveness program — available to borrowers who work in government, teaching, nonprofits or other qualifying jobs — will forgive the debt of those who enroll and make 10 years of qualifying payments.

Likewise, income-driven repayment programs, such as the Biden administration’s new SAVE plan, will forgive the debt of borrowers who make at least 20 to 25 years of qualifying payments based on their income. Such programs can be especially useful for those that owe hundreds of thousands of dollars— and in that case, a big prepayment may not actually save the borrower any money.

“If you are taking advantage of PSLF, or the new SAVE plan, you may be better off paying just the minimum and planning on forgiveness,” said Jay Zigmont, the founder of Childfree Wealth in Mississippi.

But if you’re not qualified for forgiveness and your loans have a relatively low interest rate — below 5%, experts suggest — it may still be smart to make the minimum payments while you use a larger portion of your savings for another goal, such as a downpayment on a home.

You should consider what returns you could earn by investing that cash over the long term, whether it’s in real estate or the broader market, experts say. Over the short term, a high-yield savings accounts may even offer a rate that’s higher than the interest rate on your loan, said Holly Trantham, the creative director of the website The Financial Diet.

For many, the psychological relief of a major payment can be a deciding factor. However, Trantham warned that for a lot of people, depleting one’s savings can end up being more stressful than it’s worth, especially if it means taking on a second job or making other sacrifices.

“Not ever going out, not socializing, not putting money towards anything else — I don’t think that's ultimately a worthwhile goal because you do still have to live,” she said.

--With assistance from Alexandre Tanzi.

This article was provided by Bloomberg News.