Best Advice to Pay off Student Loans

By Mentor Staff | Edited By Mentor Staff

Updated On September 26, 2022

Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.

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We asked the experts at Mentor Money for their best advice on how to pay off student loans. According to Mentor Money, the latest student loan debt statistics show that 45 million borrowers collectively owe more than $1.7 trillion. On average, that’s about $30,000 per student loan borrower. What’s the best way to pay off student loans?

Top Picks For Student Loan Refinancing

December 2022

Variable APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Variable APR means that your interest rate can fluctuate over time, which can increase or decrease your monthly student loan payment. Typically, a variable-rate loan has a lower introductory rate than a fixed-loan rate loan. Variable APR includes a 0.25% discount when you enroll in autopay.
Fixed APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Fixed APR means that your interest rate will always stay the same. Even if interest rates change, your interest rate or monthly payment will not. Fixed APR includes a 0.25% discount when you enroll in autopay.
APR
4.49% - 8.99%
4.49% - 8.99%
4.49% - 8.99%

View Details

on SoFi's website

Overview

Variable APR:
4.49% - 8.99%
Fixed APR:
4.49% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
3.99% - 8.29%
4.39% - 8.99%
3.99% - 8.99%

View Details

on Earnest's website

Overview

Variable APR:
3.99% - 8.29%
Fixed APR:
4.39% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
3.99% - 8.29%
4.39% - 8.99%
3.99% - 8.99%

View Details

on NaviRefi's website

Overview

Variable APR:
3.99% - 8.29%
Fixed APR:
4.39% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,001 ($10,001 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
3.53% - 7.24%
4.83% - 7.64%
3.53% - 7.64%

View Details

on ELFI's website

Overview

Variable APR:
3.53% - 7.24%
Fixed APR:
4.83% - 7.64%
Minimum Credit Score:
680
Minimum Income:
$35,000
Fees:
None
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 8.65%
3.99% - 8.49%
2.50% - 8.65%

View Details

on Splash's website

Overview

Variable APR:
2.50% - 8.65%
Fixed APR:
3.99% - 8.49%
Minimum Credit Score:
640
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5 – 25 years
Borrower Residency:
All states
Hardship Deferment:
Varies
Co-signer Option:
No
5.09% - 11.67%
5.39% - 11.87%
5.09% - 11.87%

View Details

on Citizens' website

Overview

Variable APR:
5.09% - 11.67%
Fixed APR:
5.39% - 11.87%
Minimum Credit Score:
Not disclosed
Minimum Income:
$24,000
Fees:
No prepayment or origination fees
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 6.80%
4.49% - 6.90%
2.50% - 6.90%

View Details

on Laurel Road's website

Overview

Variable APR:
2.50% - 6.80%
Fixed APR:
4.49% - 6.90%
Minimum Credit Score:
660
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
3.27% - 6.87%
3.99% - 10.68%
3.27% - 10.68%

View Details

on LendKey's website

Overview

Variable APR:
3.27% - 6.87%
Fixed APR:
3.99% - 10.68%
Minimum Credit Score:
680
Minimum Income:
$24,000
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except ME, ND, NV, RI, WV
Hardship Deferment:
Yes
Co-signer Option:
Yes
-
3.94% - 9.08%
3.94% - 9.08%

View Details

on ISL's website

Overview

Variable APR:
-
Fixed APR:
3.94% - 9.08%
Minimum Credit Score:
670
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except OR and ME
Hardship Deferment:
Yes
Co-signer Option:
Yes

Here’s the best advice to pay off student loans:

Always pay at least the minimum payment

When it comes to student loan repayment, always make sure to pay at least the minimum payment each month. This helps ensure that you make full, on-time payments. If you skip or miss student loan payments, your credit score can be adversely impacted. By paying the minimum payment, you will keep current on your student loan payments.

Enroll in autopay

Enroll in autopay to ensure automatic withdrawals to pay your student loans each month. Contact your student loan lender for details how to link your bank account to your student loan account. Some lenders may offer you a 0.25% interest rate reduction when you enroll in autopay. For example, if your student loan interest rate is 7.5%, your interest rate may be decreased to 7.25%, or a 0.25% discount, when you enroll in autopay.

Make extra student loan payments

The minimum payment is only the least amount you should pay each month for your student loans. However, you can pay a higher amount or pay more frequently. Why would you pay more money than required? The reason you make extra student loan payments or higher student loan payments is to save money on interest and reduce your principal balance.

This extra student loan payment calculator shows you how much money you can save when you make an extra student loan payment.

Sign up for an income-driven repayment plan

If you have federal student loans, one option is to enroll in income-driven repayment plans. If you are struggling to repay student loans, an income-driven repayment plan bases your monthly student loan payment on your discretionary income, family size and state of residence. There are four main types of income-driven repayment plans:

  • Income-Based Repayment (IBR)
  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)
  • Income-Contingent Repayment (ICR)

If you make full, on-time monthly payments for 20 years (undergraduate student loans) or 25 years (graduate student loans), you could receive student loan forgiveness.

Refinance student loans

Student loan refinancing helps you get a lower interest rate, save money and pay off student loans faster. You can refinance federal student loans, private student loans or both. With student loan refinancing, you can choose a fixed or variable interest rate as well as your loan term, which can range from five to 20 years. A lower interest rate means you can save money on interest. To qualify, you need a credit score of at least 650, recurring monthly income and enough cash flow for living expenses and debt repayment.

This student loan refinancing calculator shows you how much money you can save with student loan refinancing.

Pay off your highest interest rate loans first

After you make your minimum monthly payment, you can make an extra payment on your highest interest rate loan. Why? Don’t focus on your loan balance; focus on you interest rate. Your goal should be to pay off the highest interest rate loan first to limit the accrual of interest.

Pay off your smallest student loan balance first

With this strategy, start by making the minimum monthly payment. As an alternative to paying off the highest interest rate loan first, you could pay off your smallest student loan balance first. Why? Pay off the smallest balance first to build momentum. Start with the smallest loan balance, and once you pay it off, you can move to repay the next highest student loan balance. Continue to build more momentum as you pay off each loan.

Use extra cash to pay off student loans

If you have any extra cash – from a bonus, tax refund, inheritance or any other sources – consider making a lump-sum student loan payment.

This lump-sum student loan repayment calculator shows how much money you can save.

Make payments while in school

Get ahead of your student loan payments while you’re in school. Unsubsidized student loans begin to accrue interest while you’re in school. You’re not required to make student loan payments while you’re in school. However, if you are able to start making payments while you’re a student, consider making payments of any amount to reduce principal and save money on interest.

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