How Long Does It Take to Pay Off Student Loans?
Are you a post-secondary student or a recent grad, struggling to find your way out of debt after acquiring a student loan? If so, you are not alone. In this article, we will explore the realities of student debt and what the average time to pay off student loans looks like.
We will also explore some helpful tips on how to make sure your payments stay on track, as well as potential options if you find yourself unable to keep up. Because the longer it takes you to pay them off the worse.
Let’s take for example that you have an 80k student loan. It will take you up to 100 payments to repay it. Lucky for you there are a few things you can do to speed up the process. You can make extra payments towards your loan principal each month.
You can also refinance your student loans to get a lower interest rate and shorter repayment terms. Another thing that can help is a student loan calculator. By using it you can save time and not spend the next 20 years repaying your debt.
When Will My Student Loan Debt Be Paid Off?
So when will my student loan debt be paid off?
The average college graduate who borrowed for their education finishes repaying their student loans about 10 years after graduation. However, the typical borrower takes much longer to repay their debt. In fact, according to the most recent data from the Federal Reserve, the median repayment period for student loan borrowers is 21 years.
There are a number of factors that can impact how long it takes to repay your student loan debt. The most important factor is how much you borrowed in total. If you only took out a small loan, you could be able to pay it off relatively quickly. But if you took out a large loan, it could take much longer to repay your debt in full.
Another important factor is the interest rate on your loans. In case you have high-interest loans, you will likely accrue more interest over time and end up paying more money overall. Conversely, if you have low-interest loans, you could save money in the long run by paying off your debt more quickly.
Finally, your personal financial situation will also play a role in how quickly you are able to repay your student loans.
How Can You Pay Off Your Student Loans More Quickly?
There are a few things you can do to pay off your student loans more quickly. Here we listed a couple of things you can do:
- Make additional payments
- Get side hustles
- Consider student loan refinancing
- Stick to a budget
- Look for a possible student loan forgiveness program
- Use tax deductions to your advantage
1. Make additional payments
If you want to pay off your student loans faster, you can make additional payments on top of your regular monthly payment.
To make an additional payment, simply send in a check or money order for the amount you would like to pay above your regular monthly payment. Be sure to include your name, address, and loan account number so that the payment is applied correctly.
You can also make an additional payment by signing up for automatic payments through your lender. This way, you can schedule extra payments to be made automatically from your checking or savings account each month.
Remember, even a small additional payment can help reduce the overall cost of your loan and shorten the repayment period.
2. Get side hustles
There are a number of ways to make extra money to help pay off student loans. One option is to get a part-time job in addition to your full-time job. Another option is to start a side hustle.
There are many different types of side hustles that you can pursue. From a waiter to an Instagram influencer, you name it. But the important thing is to find something that you are passionate about and that you can commit to doing on a regular basis.
Once you find a side hustle that you enjoy, stick with it and don’t give up as it can be really helpful to you.
3. Consider student loan refinancing
By refinancing, you can extend your repayment term and lower your monthly payments. This can help you free up some cash flow in the short term, which can be used to pay off your loans faster.
When considering student loan refinancing, it’s important to compare offers from multiple lenders to get the best rate.
If you have private student loans, you may be able to refinance through a private lender. However, if you have federal student loans, you will need to consolidate them first before you can refinance.
The bottom line is that refinancing can be a helpful way to make your student loan payments more manageable. Just be sure to do your research and compare offers before making such a decision.
4. Stick to a budget
When it comes to student loans, there is no one answer to the question, “What is the usual time to pay off student loans?” The amount of time it takes to pay off student loans depends on a number of factors, including the type of loan, the interest rate, the borrower’s income and expenses, and the borrower’s payment history.
That said, there are some general guidelines that can help borrowers estimate how long it will take to pay off their student loans. For instance, most federal student loans have a standard repayment term of 10 years. Private student loans typically have shorter repayment terms than federal loans, with some lenders offering terms as short as 5 years and others offering terms up to 20 years.
Income-driven repayment plans are made for borrowers who want to make their loan payments more manageable. With an income-driven repayment plan, your monthly loan payment is based on your income and family size. That way you can stick to a budget and not go into debt.
5. Look for possible student loan forgiveness programs
One of the best ways of helping you pay off your student loan debt is through forgiveness programs.
There are a number of programs that offer student loan forgiveness, although eligibility requirements and forgiven amount vary.
The Public Service Loan Forgiveness Program forgives the remaining balance on direct federal loans for borrowers who have made 120 qualifying monthly payments while working full-time for a qualifying employer.
Other programs include Teacher Loan Forgiveness, Perkins Loan Cancellation, and Discharge, and Nurse Corps Loan Repayment Program. All in all, they can be a great help when it comes to paying your debt.
6. Use Tax Deductions To Your Advantage
There are a number of things you can do to shorten the timeline of paying your student loan. One way is to take advantage of tax deductions.
There are two main types of student loan interest deductions: the student loan interest deduction and the tuition and fees deduction.
The student loan interest deduction allows you to deduct up to $2,500 of the interest you paid on your student loans for the tax year. The tuition and fees deduction allows you to deduct up to $4,000 of the tuition and fees you paid for the tax year.
By taking advantage of these deductions, you can lower your taxable income and potentially save money on your taxes. This can free up more money that you can put toward paying off your student loans.
What Will Happen If You Don’t Make Student Loan Payments?
But what will happen if you don’t make your student loan payments?
If you don’t make your student loan payments, several things could happen. Your loan provider could report your missed payments to the credit bureaus, which could negatively impact your credit score.
You may also be charged late fees or collection costs. If your loans are in default, you may not be able to renew your driver’s license or professional licenses, and your tax refunds could be garnished. The government can also take legal action against you, including suing you for the balance of your loan plus interest and penalties.
Conclusion
Paying off student loans can be a daunting task, especially if you don’t have an exact timeline in mind. Remember, every situation is different and there are many variables that play into how long it will take for you to become debt-free.
But with the right attitude paying off a 150k,200k, or even a 400k student loan is possible. The most important thing is to be smart and determined about it. Follow the advice we gave and you will be freed from your student loans in no time.
