How to Pay Off $400,000 of Student Loans

By Mentor Staff | Edited By Mentor Staff

Updated On November 29, 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.

How do we make money? The products featured on this website are from our partners who compensate us. This may impact which companies we review, the products we evaluate, and where and how a product appears on a page. We receive compensation from a partner when you apply for and receive a product through Mentor. This helps us to support our website, offer free content, tools and calculators, and continue to be one of the leading sources on personal finance.

If you want to know how to pay off $400,000 of student loans, the good news is that you have several options. In particular, if you’re a doctor, dentist, or lawyer, then you may have borrowed significant student loans to earn your degree. From student loan refinancing to income-driven repayment, let’s explore the best ways how to pay off $400,000 of 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%
4.48% - 7.29%
3.53% - 7.29%

View Details

on ELFI's website

Overview

Variable APR:
3.53% - 7.24%
Fixed APR:
4.48% - 7.29%
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 how to pay off $400,000 of student loans:

  1. Refinance student loans
  2. Get a cosigner for student loan refinancing
  3. Use income-driven repayment
  4. Sign up for student loan forgiveness
  5. Consider the avalanche and snowball method
  6. Frequently Asked Questions

Refinance student loans

If you want to know how to pay off $400,000 of student loans, a good place to start is student loan refinancing. For example, when you refinance student loans, you can get a lower interest rate, lower student loan payment or both. This not only helps you save money, but also helps you pay off student loans faster.

Student loan refinancing is best for you if:

  • you have a high interest rate on your student loan debt,
  • a high monthly student loan payment, and
  • good to excellent credit.

With student loan refinancing, you will get a new private student loan that will be used to pay off your current student loans. You can refinance both federal and private student loans, choose a variable or fixed interest rate, and a student loan repayment term of 5 to 20 years.

Compare the latest rates for student loan refinancing.

This student loan refinancing calculator shows you how much you can save when you refinance student loans.

For example, let’s assume that you have $400,000 of student loans at a 7.0% interest rate and a 10-year repayment term. Next, let’s assume you refinance student loans at a 3% interest rate and a 10-year repayment term. Then, you would save $782 each month and $93,829 overall.

Learn more about how to refinance student loans:

Get a cosigner for student loan refinancing

How to pay off $400,000 of student loans is no easy task. Therefore, you may need to get a cosigner for student loan refinancing, particularly if you have bad credit or average credit. If you don’t refinance student loans, your student loan payments could become expensive.

This monthly student loan payment calculator shows you your monthly and total student loan payments.

Let’s assume you don’t refinance student loans. For student loans with a balance of $400,000 with a 7% average interest rate and a loan term of 10 years, your total monthly payment would be $4,644. The total repayment amount would be $557,321 (which includes $157,321 in interest).

Based on the student loan refinance example, student loan refinancing with a cosigner could save you $782 each month and $93,829 overall.

Compare: the top lenders to refinance student loans.

View: the latest rates for student loan refinancing.

Know: the difference between student loan refinancing and student loan consolidation.

Use income-driven repayment

If you want to know how to pay off $400,000 of student loans, an income-driven repayment plan may help. An income-driven repayment plan sets your monthly federal student loan payment based on your discretionary income and family size. You can pay as low as $0 each month for your federal student loans. However, most borrowers will pay 10% to 20% of your discretionary income for your federal student loans.

There are four income-driven repayment plans:

Compare each plan to determine which income-driven repayment plan is best for your financial situation. For example, your student loan payments may be different depending upon which income-driven repayment plan you choose.

Importantly, income-driven repayment plans offer student loan forgiveness too. For example, you can have your federal student loans forgiven after 20 years (undergraduate student loans) or 25 years (graduate student loans).

Sign up for student loan forgiveness

To pay off $400,000 of student loans, you could sign up for student loan forgiveness.

The federal government offers various program for student loan forgiveness. For example, some programs offer partial student loan forgiveness, while most programs provide total student loan cancellation.

(Learn more in our student loan forgiveness guide).

For example, the Public Service Loan Forgiveness program is available to federal student loan borrowers who work full-time (at least 30 hours a week) for a public service or non-profit employer and make 120 monthly student loan payments. Student loan borrowers should enroll in an income-driven repayment plan and make at least a majority of their student loan payments while enrolled. If you have FFELP Loans or Perkins Loans, you should do a federal student loan consolidation to get a Direct Consolidation Loan. Then, pay off your Direct Consolidation Loan with an income-driven repayment plan. For public service loan forgiveness, you should submit an Employer Certification Form to the U.S. Department of Education each year and whenever you change jobs.

Student loan forgiveness is available for student loan borrowers such as:

  • Military
  • Law enforcement
  • First responders
  • Doctors
  • Nurses
  • Teachers
  • Public servants

This public service loan forgiveness calculator helps you decide which income-driven repayment plan is best for you to save more money for public service loan forgiveness.

Teacher Loan Forgiveness is another example of student loan forgiveness that is available for teachers. For example, this program grants up to $17,500 of federal student loan forgiveness for teachers who are employed full-time for five complete and consecutive academic years at an elementary school, secondary school or educational service agency that serves low-income students.

Consider the avalanche and snowball method

The avalanche method and the snowball method are two strategies to help you pay off $400,000 of student loans.

Here’s how each method works:

The avalanche method

To pay off $400,000 of student loans with the avalanche method, you pay off your most expensive student loans first.

The avalanche method works like this:

  1. Make the minimum payment on your student loans.
  2. Identify the student loan with the highest interest rate.
  3. Keep paying the student loan with the highest interest rate until it’s paid off.
  4. Pay off the student loan with the next highest interest rate.
  5. Repeat until you have pay off all your student loans.

This student loan payoff calculator shows you how much money you can save when you pay off your student loans faster.

Let’s assume that you have $400,000 of student loans and a 7% interest rate. Next, let’s assume that your monthly student loan payment is $4,644. So, if you pay an extra $400 per month (for a total of $5,044 per month), you could pay off your student loans 1.08 years earlier and save $18,785.

The snowball method:

Alternatively, you can pay off $400,000 of student loans with the snowball method. With the snowball method, you pay off your lowest balance student loan first.

The snowball method works like this:

  1. Always make your minimum monthly student loan payment.
  2. Pay off your lowest balance student loan.
  3. Repeat until you pay off your lowest balance student loan
  4. Focus on paying your student loan with the next lowest balance.
  5. Follow this process until your student loans are paid off.

Frequently Asked Questions

Let's mentor your money

Get the latest personal finance advice delivered directly to your inbox.