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Paying off student loan advice

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  • #1

    Paying off student loan advice

    I have a student loan roughly $17,800 I just payed off all my credit cards and now I want to attack this guy. I pay the minimum $166.88 a month and have 12 years left on the loan. My plan is to double my payment and basically pay $333.76 a month. Its a fixed interest rate I think 5.7% My question is should I just pay the $333.76 once a month or is there any advantage to me splitting it up biweekly and making 2 payments each month of $166.88?

    Thanks for you help!
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  • #2
    I think it depends upon your Convenience. If you are comfortable with paying two times, then it is ok. But if it comes to me, I would choose to pay once a month.

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    • #3
      Paying bi-weekly would give you the equivalent of 13 monthly payments, so will get you paid off faster and with less interest, but probably not a significant amount in the grand scheme of things. (Rough calculation is you'd save six months and about $250 in interest by paying double the minimum every month and an extra $333.76 payment a year.)

      Paying twice a month, which I think is what you mean, may save you a little bit in interest depending on the compounding, but really won't make any noticeable difference in your payoff time or amount. It comes down to what works best for you.

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      • #4
        One thing you want to be careful about is how they apply the payments. Make sure they are applying the extra payment to principal and not posting it as an advance payment. The latter would get you paid off sooner but wouldn't save you anything in interest.
        Steve

        * Despite the high cost of living, it remains very popular.
        * Why should I pay for my daughter's education when she already knows everything?
        * There are no shortcuts to anywhere worth going.

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        • #5
          Originally posted by demoso View Post
          I have a student loan roughly $17,800 I just payed off all my credit cards and now I want to attack this guy. I pay the minimum $166.88 a month and have 12 years left on the loan. My plan is to double my payment and basically pay $333.76 a month. Its a fixed interest rate I think 5.7% My question is should I just pay the $333.76 once a month or is there any advantage to me splitting it up biweekly and making 2 payments each month of $166.88?

          Thanks for you help!
          No. There is no advantage to splinting it in to biweekly payments. Its will not change your interest rate and pay back period.

          Comment

          • #6
            Originally posted by demoso View Post
            I have a student loan roughly $17,800 I just payed off all my credit cards and now I want to attack this guy. I pay the minimum $166.88 a month and have 12 years left on the loan. My plan is to double my payment and basically pay $333.76 a month. Its a fixed interest rate I think 5.7% My question is should I just pay the $333.76 once a month or is there any advantage to me splitting it up biweekly and making 2 payments each month of $166.88?

            Thanks for you help!
            No. There is no advantage to splinting it in to biweekly payments. Its will not change your interest rate and pay back period.

            Comment

            • #7
              Paying off student loan is not easy. here are some tips for paying off your student loans:
              Know your enemy
              Decide to pay off the debt early – no matter what
              Prioritize your debt
              Set up a budget, and stick to it
              Keep track of your loan profile, and contact the servicer promptly if problems arise.

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