Enter the $2,000 Nitro Scholarship now! Apply in 3 Minutes!

Why Paying Ahead—Even Just a Little—Can Have a Big Impact on Your Student Loans

Paying extra on your student loans every month can make a big dent over time—even if you only tack on as much as the price of a movie ticket. 

How can a few extra bucks a month make a difference? Let's talk about how this works. 

When your student loan is new, most of your monthly payment is applied to your interest—not your principal. That’s why, if you just started paying off your loan, you might notice that your balance isn’t budging even though you’re up to date on your payments.

Later on, the interest v. principal balance shifts—and more of your payment is applied to the principal. Then you’ll start to see more progress, but this takes several years or more to occur. 

However, if you make more than the minimum payment, lenders have to put that directly toward the principal—it’s the law—as long as you don’t have any accumulated fees or overdue interest to pay off first.

If you make more than the minimum payment, especially early on, it can make a big difference in your principal. Lower principal = less interest charges every month. That can lead to big-time savings over the long run. 

And just to show you, we’ve run some numbers in our Student Loan Repayment Calculator

See Also: Paying Off Student Loans

New call-to-action

Let’s say you have a $37,000 student loan—around the national average—and you’ve got nine years to pay it off. You pay $416 per month.

Screenshot1

If you kicked $5 extra toward your student loan every month—a little more than what you’d pay for a latte—you’d get out of your loan a month early, and save $116 in interest.

Screenshot2

It’s not a lot—although an extra $116 in your pocket never hurt anyone. But what happens if you paid $20 extra toward your loan?

 You save $459 in interest over the term of your loan—and pay it off six months early.

Screenshot4

And if you put an additional $50 per month toward your loan, you save $1,059 in interest—and get out of your loan more than a year ahead of time.

Screenshot3

You really start to see some benefits if you can find an extra $100 per month to put toward your loans. In that scenario, you save almost $2,000 in interest—and kill your loan two years ahead of the due date.

Screenshot5

Sure, the extra interest savings are great—but to many people, the real gift is the time. What would you do with two extra years of your life without student loans? 

You don’t have to put a ton of extra money toward your student loan every month to make a dent. What you can afford—from as little as $5 to as much as $100—can buy you both money and time.

Want to find out how much you could save by refinancing? See if you're Refi Ready.

Additional Nitro Recommended Student Loan Lenders

Lender Rates (APR) Loan Types Terms Eligible Degrees Eligible Loans  

Sallie Mae

2.62% - 13.72%1 Variable & Fixed
10 - 15 years

Undergrad Students Learn More

View Disclosure

Nelnet Bank

2.34% - 12.02%1 Variable & Fixed
Multiple Loan Terms

Undergraduate, Graduate, MBA, Law, Medical, Healthcare, Dental, PhD Student & Parent Learn More

View Disclosure

Ascent

1.73% - 14.75%1 Variable & Fixed
5 - 15 years

4

Undergrad & Graduate Students Learn More

View Disclosure

Earnest

1.34% - 12.78%1 Variable & Fixed
5 - 15 years

3

Undergrad & Graduate Student & Parent Learn More

View Disclosure

FundingU

6.99% - 12.99%1 Variable & Fixed
10 years

Undergraduate No-Cosigner Student Loan Learn More

View Disclosure

MPowerFinancing

7.52% - 14.98%1 Fixed
10 year only

Undergrad & Graduate Student Learn More

View Disclosure

Education Loan Finance

1.86% - 11.99%1 Variable & Fixed
5 - 15 years

Undergrad & Graduate Student & Parent Learn More

View Disclosure

Rates (APR) 2.62% - 13.72%1
Loan Types Variable & Fixed
Terms 10 - 15 years

Eligible Degrees Undergrad
Eligible Degrees Students
Rates (APR) 2.34% - 12.02%1
Loan Types Variable & Fixed
Terms Multiple Loan Terms

Eligible Degrees Undergraduate, Graduate, MBA, Law, Medical, Healthcare, Dental, PhD
Eligible Degrees Student & Parent
Rates (APR) 1.73% - 14.75%1
Loan Types Variable & Fixed
Terms 5 - 15 years

4

Eligible Degrees Undergrad & Graduate
Eligible Degrees Students
Rates (APR) 1.34% - 12.78%1
Loan Types Variable & Fixed
Terms 5 - 15 years

3

Eligible Degrees Undergrad & Graduate
Eligible Degrees Student & Parent
Rates (APR) 6.99% - 12.99%1
Loan Types Variable & Fixed
Terms 10 years

Eligible Degrees Undergraduate
Eligible Degrees No-Cosigner Student Loan
Rates (APR) 7.52% - 14.98%1
Loan Types Fixed
Terms 10 year only

Eligible Degrees Undergrad & Graduate
Eligible Degrees Student
Rates (APR) 1.86% - 11.99%1
Loan Types Variable & Fixed
Terms 5 - 15 years

Eligible Degrees Undergrad & Graduate
Eligible Degrees Student & Parent

About the author