When the time comes to borrow or repay loans, students may wonder: how long does it take to pay off student loans? How long it takes to pay off student loans varies based on your loan type, balance, and repayment plan. Repayment periods can last from 10 – 30 years. This may sound intimidating, but there are many ways you can adjust your repayment period. Keep reading to learn more about how long it takes to pay off loans.
Related: Student loan consolidation vs refinancing
Standard repayment plan
10-year repayment period
Federal direct and Family Federal Education (FFEL) loan borrowers are placed on the standard repayment plan. This plan has a 10-year repayment period and payments are at least $50 per month. The standard repayment plan is ideal for paying off loans quickly while keeping interest low. If you stick to this plan, you will save money on interest over time.
10 to 30 year repayment period
Direct consolidation loans can also be paid through the standard repayment plan. Direct consolidation loans combine all federal loans into one loan. This makes the loan balance larger and, therefore, the repayment period longer. Direct consolidation loans can take 10 – 30 years to repay.
The standard plan doesn’t work for everyone. According to EducationData.org, it takes the average graduate 20 years to pay off their debt. There are other plans that allow students to extend their repayment period if needed.
Also see: Scholarships360’s free scholarship search tool
Graduated and extended repayment plans
The government offers graduated and extended repayment plans for federal loans.
10-year graduated repayment period
The graduated repayment plan maintains the 10-year repayment period, but it makes monthly payments more manageable. Payments start low and increase every two years. This is a good plan if your income is low now, but you expect it to grow over time.
25-year extended repayment plan
The extended repayment plan has a 25-year repayment period. Students have the option to choose between fixed or graduated payments on this plan. The longer repayment period keeps monthly payments low, but you’ll end up paying more in interest over time.
Income-driven repayment plans
If you need your payments to stay low relative to your income, an income-driven repayment plan could be right for you. The government offers four income-driven repayment plans. Each is different in its own way, but they all will extend your repayment period to 20 or 25 years.
Like the extended repayment plan, this means you’ll pay more in interest.
Private student loans
The previously mentioned repayment plans are offered by the government on federal loans only.
Private lenders have their own repayment period and repayment plans. Most lenders offer a 10-year repayment period similar to the government. Others offer a 25-year repayment plan. With private loans, the repayment period will vary based on your indebtedness and the lender’s terms.
Make sure that you read up on the terms of your private loans to find out how long you’ll be paying them off.
Also see: How much student loan debt is too much?
Tips for repaying loans quickly
Since longer repayment periods mean more interest, you should try to pay off your loans as quickly as you can.
Pay more each month
The best way to repay your debt quickly is to make more than the minimum payment every month. This will keep interest down over the course of repayment, which will save you time and money. Adding a bit more to each payment is a great way to pay off your debt faster.
Pay bi-weekly
Another strategy for repaying loans faster is to pay bi-weekly instead of monthly. Calculate your bi-weekly payment by cutting your monthly payment in half. Pay that amount every two weeks. You’ll pay the same amount every month, but you’ll have made one extra payment by the end of the year.
Stick to your payment plan!
Lastly, make and maintain a budget. Keeping payments consistent is important to avoid entering default or having to extend your repayment period using deferment or forbearance.
For more information about paying off student loans, consult our guide entitled: “how to pay off student loans.” If you want to pay off your loans early, our “paying off student loans early” article might come in handy.
Remember to look to the future while repaying your student loans, and make your plan accordingly. You won’t be in debt forever, and it will feel great when you’ve made your final payment!
Jack Wang | Wealth Advisor, Innovative Advisory Group
Expert Perspective
Frequently asked questions about how long it takes to pay off student loans
Why is it hard to pay off student loans?
What happens if I never pay my student loans?