What is the best way to pay off student loans?

For most borrowers, the most cost-effective strategy is the avalanche method — pay minimums on all loans and direct extra payments to the highest-interest loan first. If you have both federal and private loans, consider prioritizing private loans (which lack federal protections). Also check whether you qualify for employer student loan assistance, PSLF, or income-driven repayment forgiveness.

Should I pay off student loans or invest?

Compare your loan interest rate to expected investment returns. If your loans are at 5% or higher, paying them off is often a guaranteed return that's hard to beat risk-free. If your loans are at 3–4% (common for older federal loans), investing may produce higher long-term returns. Many people split the difference — paying extra on loans while also contributing enough to get their full employer 401(k) match.

College & Student Loans

What Is the Fastest Way to Pay Off Student Loans?

See how extra payments shorten your payoff timeline, cut your total interest, and calculate the equivalent annual return on every extra dollar you put toward your student loans.

Current Monthly Payment

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New Monthly Payment

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Est. Interest Saved

—

Break-Even

—

Your Student Loan

Total Loan Balance

Interest Rate

Monthly Payment

Extra Payment

Extra Monthly Amount

Additional amount above your minimum payment

Estimated Time Saved

2 years, 4 months

Payoff: May 2033 vs. September 2035

Estimated Interest Saved

$2,532

25.7% less interest

Remaining Balance Over Time

Shows remaining loan balance under each payment scenario. The gap between lines represents the faster payoff from extra payments.

Loan Details

Current Loan Balance

Interest Rate (Annual)

Federal rates: 5.50% (undergrad), 7.05% (grad)

Minimum Monthly Payment

Extra Payments

Extra Monthly Amount

Additional amount above minimum payment

Quick select:

Estimated Interest Saved

$3,444

By adding $100/mo to your $400/mo payment

Time saved

2 years, 6 months

Effective return

9.2%

Loan Balance Over Time

Shows remaining principal under each payment scenario. The gap between lines represents the faster payoff from extra payments.

Side-by-Side Comparison

Metric	Minimum Only	With Extra	Difference
Monthly Payment	$400.00	$500.00	+$100
Time to Payoff	9 years, 11 months	7 years, 5 months	-30 mo
Total Interest	$12,565	$9,122	-$3,444
Total Paid	$47,565	$44,122	-$3,444
Payoff Date	March 2036	September 2033	—

Total Cost Breakdown

Principal is the same in both scenarios. The shorter red bar with extra payments shows the interest savings.

Yearly Payment Schedule

Year	Starting Bal.	Payments	Principal	Interest	Ending Bal.
1	$35,000	$6,000	$3,838	$2,162	$31,162
2	$31,162	$6,000	$4,095	$1,905	$27,067
3	$27,067	$6,000	$4,369	$1,631	$22,698
4	$22,698	$6,000	$4,662	$1,338	$18,036
5	$18,036	$6,000	$4,974	$1,026	$13,062
6	$13,062	$6,000	$5,307	$693	$7,754
7	$7,754	$6,000	$5,663	$337	$2,092
8	$2,092	$2,122	$2,092	$30	$0
Total		$44,122	$35,000	$9,122

About This Analysis

To see how a specific extra payment changes your payoff date and total interest, enter any amount in Step 2 above — the results and charts update instantly. This calculator provides estimates based on the inputs you supply. It assumes a fixed interest rate for the duration of repayment and that extra payments are applied directly to principal each month. It does not account for income-driven repayment plan recalculations, forgiveness programs, deferment or forbearance periods, capitalized interest, or changes in payment amounts over time. The effective return figure shown is a simplified estimate of the equivalent annual investment return your extra dollars would need to earn to match the interest savings from paying off the loan early; it is not a guarantee of financial results. Results are for informational and educational purposes only and should not be considered financial advice. Consult your loan servicer for exact payoff details and to confirm that extra payments are applied to principal.

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What Is the Fastest Way to Pay Off Student Loans?

Your Student Loan

Extra Payment

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