How long does it take to pay off student loans?

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After graduation day has come and gone, you’ve probably forgotten the details of those student loans you took out as a freshman. But as your loan’s grace period comes to an end and repayment begins, it’s time to learn what to expect during your loan’s repayment period. 

 

How long it takes to pay back your student loans depends on exactly what type of debt you have and how much you can afford to pay each month. Standard repayment periods are often about 10 years but can stretch up to 20 years or more. And if you’re able to pay off your debt ahead of schedule, you can save some serious dough on interest payments. 

 

Here’s how long it takes to pay off student loans, and how you can pay yours off faster. 

 

How Long Does it Take to Pay Off Federal Student Loans? 

One of the biggest perks of federal student loans is the flexible repayment plans on offer. When you start repayment, you can select from several options and enroll in the plan that makes the most sense for your budget. 

 

With the Standard Repayment plan, you’ll pay off your loans in 10 years. Each monthly payment is a fixed amount under this option, though you can also opt for the Graduated Repayment plan. With graduated repayment, you’ll still pay off your loans in 10 years, but monthly payments start low and slowly increase about every two years. All borrowers of eligible loans can enroll in these programs. 

 

Does a decade seem like too short a timeframe to pay off your debt? Then the Extended Repayment plan may be a better fit. You can make either fixed or graduated payments, and you’ll have 25 years to pay off your debt. If your loans total $30,000 or more, you may be eligible. 

 

If you can’t afford your payments under the Standard, Graduated, or Extended plans, you could be eligible for income-driven repayment. These plans determine your payments based on your discretionary income and repayment continues for 20 to 25 years. After the loan’s term has ended, any remaining debt you have will be forgiven. 

 

There are several income-driven plans to choose from, including:

  • Income-Based Repayment (IBR): Your monthly payment is set at 10 or 15 percent of your income, depending on when you first took out a loan. Payments last 20 to 25 years, again depending on when you got your first loans. 
  • Revised Pay as You Earn (REPAYE):  Monthly payments are set at 10 percent of your income; the repayment period is 20 years for undergraduate loans and 25 years for graduate or professional loans. 
  • Income-Contingent Repayment (ICR): You’ll either pay 20 percent of your monthly income or the amount you would pay with a fixed 12-year repayment, whichever is less. Repayment lasts 25 years.

 

Repayment plan

Repayment period

Eligible loans

Standard and graduated plans

10 years

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • PLUS loans
  • Federal Consolidation Loans

Extended Repayment

25 years

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • PLUS loans
  • Federal Consolidation Loans

Income-Based Repayment

20-25 years

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Student PLUS loans
  • Federal Consolidation Loans (with exceptions)

Revised Pay as You Earn

20-25 years

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Student PLUS loans
  • Federal Consolidation Loans (with exceptions)

Income-Contingent Repayment

25 years

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Student PLUS loans
  • Federal Consolidation Loans

Source: U.S. Department of Education

 

How Long it Takes to Pay Off Private Student Loans

If you have private student loans, the exact repayment period depends on your loan servicer. Many private loans come with standard repayments of 10 years, though some can be as short as 5 years or as long as 20 years (or more). Confirm the exact terms of your loan with your servicer if you’re not sure.

 

Usually, you will select your repayment period when you take out a private loan. The shorter your repayment period, the higher your monthly payments will be — but you’ll also likely pay less in interest if you repay your loan more quickly.  

 

How to Pay Off Student Loans Faster

If you’re looking to save some money, paying off your student loans ahead of schedule can lower your total interest payments by hundreds or thousands of dollars. Here are a few ways you can pay off your student debt early.

 

  • Pay more than the minimum amount each month: If you can afford it, pay more than needed on each bill. This can chip away at your debt more quickly and shave years off your repayment. 
  • Consider refinancing your debt: If you can qualify for a lower interest rate by refinancing your debt, you could potentially pay off that debt faster. A lower rate means your loans will accrue interest more slowly, and you can dedicate more of your payments towards your principal balance. But beware: If you refinance federal student loans, they become private debt and you’ll lose access to federal benefits such as income-driven repayment and forgiveness programs.
  • Enroll in autopay: Many loan servicers offer an interest-rate reduction (usually about 0.25%) if you enroll in autopay programs. Though 0.25% may not sound like much, every little bit counts when you’re repaying debt.

 

When you took out student loans as a freshman, you probably never imagined you’d be paying them off for two decades. But with a little planning and creativity, you can pay off that debt ahead of schedule.  

 

The 4 Most Important Takeaways

  • Federal student loans generally offer more flexibility than private loans when it comes to repayment options. 
  • Federal loans typically take about 10 years to pay off, but special repayment plans can stretch that to 20 or 25 years. 
  • Repayment periods for private student loans depend on your loan servicer, but can range from 5 to 25 years. Most private lenders offer a standard 10-year repayment plan. 
  • If you’re able to do so, repaying your debt early can save you serious money in interest payments.

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