One Simple Trick to Pay Off Your Student Loans Faster

By Jen Williamson Updated on May 3, 2019

Sick of making payments on your student loan? Here's a very simple thing you can do to pay it off faster: make biweekly half-payments instead of making one full payment every month.

That's it. It might not sound like a big, impressive change, but using this method saves you money and shaves months off your loan repayment. So what's the magic behind this method?

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Making half-payments every other week does two things:

  1. It reduces what you're paying in interest, and
  2. It adds up to one extra payment per year.

Don’t increase the amount you actually pay per month

I mean—you can if you want. But you don’t have to for this to work.

Just take your regular monthly payment and split it in half. Pay the first half at the beginning of the month, and the second half two weeks later. Continue to make half-payments every other week—26 weeks of the year. 

This schedule equals out to 26 half-payments per year—or 13 full payments. That’s one full payment more than the regular 12-payment cycle you’d be on if you made one payment per month.

The great thing about this method is it’s relatively painless—you don’t feel like you’re paying more every month, but you do wind up making that extra payment every year.

And it makes a difference. Let’s say you have a $25,000 student loan with 7% interest, and you’re paying it off under a standard 10-year plan. Your monthly payment is somewhere in the realm of $222.

Making one extra payment per year accelerates your payments by more than $2,000—and gets your loan paid off about 10 months earlier. 

See also: Everything You Need to Know to Lower Your Student Loan Payments 

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Make it automatic

Here’s a way to make this completely effortless: set it up with your lender through AutoPay.

Some lenders have an AutoPay option that will let you set up your payments for every two weeks, rather than once a month. 

If your lender doesn't have a biweekly payment option, schedule the second half-payment to come from your bank. Most online banking systems allow you to set up automatic, recurring payments. 

If you don’t already have an automatic bill pay option enabled, you should know that AutoPay has several other benefits, too. First, it means you’re much less likely to incur fees and other charges for sending in a bill late or forgetting to send it at all.

Second, many lenders will give you a discount on your interest rate just for setting up AutoPay. The most common rate is 0.25%. This can save thousands off the cost of your student loan over the long term.

See also: Is Your Student Loan Lender Overcharging You? 

This simple trick might not sound like it would make much difference—but it does. Making biweekly payments means you make an extra payment every year, pay less in interest over the long term and get your student loan off your plate faster. 

It’s not easy to pay more on your student loan than you have to—if it was, you wouldn’t need this advice. So setting up AutoPay and adopting a strategy like this, which makes the extra payment less painful, can really make a difference.

Want to get rid of your student loan even faster? Find out how much you could save.

Published in: Paying Off, Student Loan Debt

About the Author
Jen Williamson

Jen Williamson is a freelance writer living in Brooklyn. She has written for a variety of industries, including software, education, business, and personal finance. Prior to that, she worked at an adult literacy nonprofit in Philadelphia, where she coached nontraditional students in passing the GED test and applying for college. When she isn’t writing or reading—which is rare—she can usually be found planning her next travel adventure, training for a marathon, or sneaking in somewhere she’s not supposed to be. Read more by Jen Williamson