Every loan has a due date each month, which is when most people opt to make their payment.
However, to pay student loans you don’t need to be restricted to paying on the same day each month. You can customize your loan payment plan to match what works best for you.
Here are five different ways you can pay student loans.
1. The Default: Pay Student Loans Monthly
By default, you will make a payment once per month on the date your loan servicer decides. Not a whole lot of thought goes into picking that date. Sometimes it’s even decided by a computer.
If your loan payment is due at an inconvenient time each month, you can call your servicer and ask them to move your payment to another date. However, your loan will still be due on the same day each month, which isn’t ideal for many of us.
2. Shift Your Payment Date
If you are in a position to make a full extra payment or two, you can get ahead on your loan and push your next due date out into the future. Not all lenders allow this, but when I was paying Great Lakes it was a viable option.
Once I was a few months ahead on my loans, I didn’t have to pay for months. But I wasn’t going to let that interest accumulate while waiting to make another payment. I wanted my loans paid off early.
Since no payment was due for months, I could make a monthly payment any day of the month I wanted without penalty.
3. Split Your Payment into Multiple Parts
Let’s say your student loan payment each month is $500. Did you know you don’t have to pay the whole $500 at once? You can split your payment into multiple payments, as long as the total is $500.
Most people don’t get paid once per month, so looking to pay student loans monthly might not make sense. Instead, you can pay $250 every payday. If you are paid twice each month (24 paydays per year), you will still be paying the same $500 per month. It’s just broken up so the timing of your student loan payment matches the timing of your income.
If you are paid every other week (26 paydays per year), you would make the same $500 minimum each month. But two months each year you are also making a bonus payment. That’s the same as making a full extra payment each year. And since you’re used to paying student loans every payday, it doesn’t feel like you are spending more.
Paying a little extra with 26 paydays can shave months off of your student loans, or years if you are paying a little extra. It’s all about lining up your student loan payments with your paydays.
4. Pay a Little Extra Every Payday
If paying every payday sounds good to you, you can set up automatic payments so you don’t even have to think about it. But if you want to pay off your loans even sooner, consider adding a little extra to your bi-weekly payment.
When I had to pay student loans, I made a payment every payday and regularly increased that amount. I started paying half of my payment twice each month but then realized that adding an extra $10 on top would cut an extra few months off of my loans. Then I increased it to $20 extra each payday, then $40, then $50.
Eventually, I was making a full payment each payday. That was the equivalent of making 26 full student loan payments each year, instead of the scheduled 12 payments.
While everyone doesn’t have the ability to make the equivalent of 26 payments each year, if you focus on your budget and work hard to maximize your income, you can probably afford to add just a little extra. Maybe even $5 or $10 per payment. It all adds up!
This is part of the strategy I used to pay off my $40,000 student loans two years after graduation.
5. Find the Right Payment Schedule for Your Needs
Maybe you are paid monthly, and monthly payments make the most sense. Perhaps you are paid weekly, so a smaller payment every Friday works for you. Or, you are a freelancer with irregular income, and making large payments less frequently is your best option.
Working to pay student loans is never fun, but you can make a game of paying your loans off as quickly as possible. You can change your payment plan anytime as long as you meet the minimum, so test out different strategies to see what works best for you.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 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 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% 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 April 17, 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 04/17/2019. 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 email@example.com, 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.
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 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.
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 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|