Student loan payments typically become due six months after graduation. But that doesn’t mean you can’t start paying them off while you’re still in school. In fact, that’s exactly how I paid off $90,000 in student loans within two years of graduating from my MBA program.
Paying off your student loans early comes with significant financial benefits, too. Read on to find out how easy it is to make student loan payments while you’re still enrolled.
Build a budget for your student loan payments
Student budgets are notoriously frugal, but students with income have a leg up when it comes to finances. If you can set aside money each month to start paying your student loans, you will graduate in much better shape than most of your peers.
If you do not have a budget, there is no better time than the present to start. Check out budgeting apps to find out where your money is going. You might be able to save a few bucks each month to make room for loan payments. Some apps are free, like Mint, or subscription-based, like You Need a Budget.
Earn more to make student loan payments
What if your budget is too tight to make student loan payments even after trimming unneeded expenses? You may do well earning a little bit more on the side, either through a part-time job or side hustle.
Going to college is expensive and deserves your full attention. It is a job in itself. However, many students find they do better managing their time and money with a job while in school. Consider a paid internship or another part-time job that leaves you time for your studies.
Even if you can’t commit to a part-time job, you can work as a tutor, researcher, or find other jobs on campus that don’t eat at your free time.
Pick a student loan you want to pay down first
Take a hard look at your student loans to see which are accruing interest while you’re in school. Then, find the loan with the highest interest rate and focus on paying it down first. Even if all you can afford is $10 to $20 a month, it’s better than nothing.
When I was working on my MBA, I had two large subsidized loans that were not accruing interest and two bigger unsubsidized loans that were accruing interest.
My unsubsidized loans accrued interest each month according to their balance and interest rate. Since I didn’t want my loan balances going up during school, I set up automatic monthly payments to cover the interest, plus $5 for good measure.
In school, I had a full-time job and lived on a shoestring budget. This helped me get the income I needed to put extra money towards my loans each payday. I focused all extra payments on the smaller of my two unsubsidized loans so the balance would fall during school.
Most students don’t have full-time jobs during school, so don’t feel bad if you can’t pay as much as I did. Try to cover at least the interest accruing each month. You’ll thank yourself later.
Set up online payments for your loans
When I was in school, I had automatic payments for two loans and was making an additional payment each payday. I used my student loan servicer’s website to get all that set up.
If you’ve never gone to your student loan servicer’s website, grab your most recent student loan statement to figure out who your loan servicer is.
A servicer is a company that manages your loans, the place you ultimately send your monthly payments to. Common student loan servicers include Great Lakes, Nelnet, and a handful of others.
Log into the servicer website so you can see your loan details. You’ll learn how much interest you’ve been accruing each month and how to set up automatic payments and make one-time payments.
If you have the cash cushion to make automatic payments, then do so. It will make student loan payments easier to manage. If your income is less reliable, you can make payments manually. Make a calendar reminder on your phone so you remember to make on-time payments each month.
Develop healthy habits in school
I once had a band teacher in middle school who told us, “How you practice is how you will perform.”
If you start making regular student loan payments while you’re still enrolled, things will feel a lot easier after graduation. Think of this time as practice in managing debt.
Whether you are getting started with a few bucks per month or a few hundred, you are getting ahead on your loan payments and building healthy habits.
Interested in refinancing student loans?Here are the top 7 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.45% APR (with Auto Pay) to 7.49% APR (with Auto Pay). Variable rate loan rates range from 2.14% APR (with Auto Pay) to 6.79% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of September 6, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 09/06/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.19% effective August 10, 2019.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
7 Important Disclosures for College Ave.
College Ave Disclosures
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1College Ave Refi Education loans are not currently available to residents of Maine.
2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 08/01/2019. Variable interest rates may increase after consummation.
|2.14% – 6.79%1||Undergrad & Graduate|
|2.14% – 7.84%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.43% – 7.60%4||Undergrad & Graduate|
|2.14% – 8.01%5||Undergrad & Graduate|
|2.06% – 8.93%6||Undergrad & Graduate|
|2.74% – 7.24%7||Undergrad & Graduate|