How Long Will It Take Me to Pay Off My Student Loan?

Check out this blog post to find out how long it will take you to pay off your student loan based on different repayment plans!

Checkout this video:

Introduction

Assuming you have a fixed interest rate, extra payments will shorten the repayment timetable of your loan. In order to calculate how long it would take to pay off your student loan, you would need the following information:
-The amount borrowed
-The interest rate
-The monthly payment amount

How long will it take to pay off my student loan?

The answer to this question largely depends on the type of student loan that you have. If you have a private student loan, it will generally take you longer to pay it off than if you have a federal student loan. Also, the interest rate on your loan will affect how long it will take you to pay it off.

The Standard Repayment Plan

The Standard Repayment Plan is the default repayment option for federal student loans. Your monthly payments will be fixed, and you’ll pay off your loans in 10 years.

The Standard Repayment Plan is generally the best option if you can afford the fixed monthly payments. The sooner you pay off your loans, the less interest you’ll pay overall.

If you have a Direct Loan or a Federal Family Education Loan (FFEL), you can switch to the Standard Repayment Plan at any time by contacting your loan servicer.

The Graduated Repayment Plan

The Graduated Repayment Plan is a repayment option that is available to all federal student loan borrowers. With the Graduated Repayment Plan, your monthly payments will be lower when you first begin repaying your loan, and will gradually increase, usually every two years. The amount of time it will take to repay your loan in full will be longer than it would be with the Standard Repayment Plan.

The Extended Repayment Plan

The Extended Repayment Plan is available to all borrowers with Direct Loans first disbursed on or after July 1, 2006, with the exception of Parent PLUS Loan borrowers. You’re eligible if you have more than $30,000 in outstanding Direct Loans. With this plan, your monthly payments will be lower than they would be under the Standard Repayment Plan because your repayment period will be extended to up to 25 years. As a result, you’ll pay more interest over the life of the loan than you would under other repayment plans, but your monthly payments will be more manageable.

The Income-Based Repayment Plan

The income-based repayment plan caps your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. Once you enroll in the Income-Based Repayment Plan, your monthly payment will never increase, even if your income goes up or you have more debt.

Under this plan, you will need to reapply for the plan and submit updated income information (and family size information, if applicable) each year. If your income or family size decreases, your monthly payment could go down.

The term of your loan may also increase beyond the 10-year Standard Repayment Plan term if not all of your loans are paid off by then. This is because, under the Income-Based Repayment Plan, a portion of each payment is applied to interest and a portion is applied to principal (the amount you borrowed). More interest accrues if payments do not cover all of the accrued interest.

You may pay more interest over the life of the loan than you would under other repayment plans. However, any outstanding balance on your loan will be forgiven if it is not repaid in full after 25 years of qualifying payments (which may be longer than the original loan term).

The Pay As You Earn Repayment Plan

The Pay As You Earn Repayment Plan is available to eligible federal student loan borrowers. Under this plan, your monthly loan payment is determined as a percentage of your discretionary income.

To qualify for the Pay As You Earn Repayment Plan, you must demonstrate a partial financial hardship. This means that the monthly amount you would be required to pay on your eligible loans under a standard 10-year repayment plan is higher than the monthly amount you would be required to pay under the Pay As You Earn Repayment Plan.

If you qualify for the Pay As You Earn Repayment Plan and remain enrolled in the plan, any remaining balance on your loan will be forgiven after 20 or 25 years of qualifying monthly payments (depending on when you received your loan).

To learn more about this repayment plan and to see if you qualify, visit the Federal Student Aid website.

The Income-Contingent Repayment Plan

The Income-Contingent Repayment Plan is a repayment option for Direct Loans, including Direct Consolidation Loans. Under this plan, your monthly loan payment is based on your income and family size. As your income increases or decreases, so do your payments. And if your income ever drops to zero or below, you can get a forbearance, allowing you to temporarily stop making payments. You’ll have up to 25 years to repay your loan in full. If you still have a balance when the 25 years are up, the unpaid portion will be forgiven.

What if I can’t afford my student loan payments?

If you’re struggling to make your student loan payments, don’t wait until you’re in default to seek help. You have options. You can contact your loan servicer to discuss your repayment options. You can also look into deferment or forbearance if you’re having trouble making payments. Don’t wait until it’s too late to get help.

Deferment

If you can’t afford your student loan payments, don’t worry. You have options.

One option is deferment. With deferment, you can temporarily postpone making payments on your loan. To qualify, you must meet certain requirements, such as being enrolled in school or having recently lost your job.

If you’re having trouble making payments, contact your loan servicer right away. They can help you understand your options and find the best solution for your situation.

Forbearance

Forbearance is a way to temporarily stop or reduce your student loan payments. It’s typically used if you can’t afford your payments, but expect your financial situation to improve in the future.

If you have a Direct Loan or a federally-backed loan from another lender, you might qualify for forbearance. If your loan is owned by a guarantee agency, you might also be able to get forbearance through that agency.

With forbearance, you might be able to:
-Postpone your payments
-Make smaller payments over a longer period of time
-Make no payments for a limited period of time

If you have trouble making your student loan payments, talk to your loan servicer about all of your options. Forbearance is just one way to deal with financial difficulties.

Conclusion

If you’re wondering how long it will take to pay off your student loan, the answer is that it depends on a number of factors. The biggest factor is how much money you borrowed. Other important factors include the interest rate on your loan, the repayment plan you choose, and whether you’re able to make extra payments.

Assuming you borrowed the average student loan amount of $28,400 for four years of college (based on data from the 2018-2019 academic year), here’s an estimate of how long it would take to pay off your loan under different circumstances: