Should I pay off my student loan? [Complete Guide]

By Andrew Paulson, CSLP, Lead Student Loan Consultant and co-founder of our partner site

Deciding how and when to pay off student loans is not an easy decision for most. Many of you are feeling weighed down by your mortgage-sized student loans and are wondering, “How did I get into this mess?”

Student loans cause stress and burnout for doctors, dentists, and other high-earning professionals. Many make bad financial decisions for their student loans despite the best of intentions.

Here’s a guide to help you avoid making student loan repayment mistakes.

How long does student loan repayment take?

How long it takes to pay off your student loan depends on your loan type and the repayment plan you choose. Federal and personal loans have different payment options.

Pay off federal student loans

Some student borrowers choose amortized loan options such as the standard 10-year term or the extended 25-year term. Amortized options have a fixed monthly payment and a fixed payout date. Graded 10-Year and Extended Graded 25-Year are similar, but monthly payments start lower and increase every two years until their respective payout dates.

Income-linked repayment (IDR) plans are also common among student borrowers. However, their payments are based on income rather than the amount of debt, and most are on track to receive loan forgiveness through tax forgiveness after 20 or 25 years, or through public service loan forgiveness (PSLF) after 10 years. to reach. Some borrowers end up paying off their loans before being forgiven either way, and that’s because they overpay. You eliminate the loan forgiveness benefit if you repay your loans before the forgiveness date. You don’t want to pay them off in an IDR plan as the interest rates are likely to be 6-8%. Refinancing your loans privately would allow you to lower interest rates to 2-4% and save thousands in interest.

Repay private student loans

Borrowers choose an amortization schedule that fits their budget, between five, seven, 10, 15, or 20 years. Some private lenders offer repayment terms longer than 20 years, but this is not common.

How long do you have to pay off student loans?

Each student loan disbursement or closing date varies by loan type and repayment schedule.

According to, it takes the average student borrower 20 years to repay student loan debt. It takes top earning doctors seven years on average to pay off student loans. The WCI community typically follows the latter approach, living like a resident or following PSLF.

When do you start paying student loans?

You should start making student loan payments when you graduate school, fall below mid-term enrollment, leave school, end the grace period, or when your student loan is being paid off.

Start making payments as early as possible to minimize interest accrual and/or start crediting payments for loan forgiveness programs.

While you are in school, you can pay off the student loan or, if you can afford it, at least pay the interest.

Deferring student loan payments until after the residency is a bad idea because

  1. Student loans continue to grow
  2. You will not get credit for loan forgiveness
  3. You will not receive interest rebates from any IDR plan
  4. Interest is activated when you, as a Caregiver, start repaying

What happens if you don’t pay your student loans?

The day you miss a payment, your student loans become delinquent. If you continue to miss payments for 270 days (nine months), your loans will default.

Pay off student loans

A default can cause your entire loan balance to become due, affect your ability to obtain new student loans or scholarships, and affect your credit score. The federal government has the power to garnish wages, seize tax refunds, file lawsuits, suspend professional licenses, etc.

Never allow your loans to default or worse, default on payments. If you can’t afford payments, take some temporary leniency (it won’t hurt your credit, but you can’t stay lenient forever either). Keep in mind that the monthly income-based repayment (IDR) plan payments are quite affordable for most and are a better alternative to leniency, arrears, and default.

If you lost your job and have an IDR plan, submit a certification form and your payments will be reduced to zero dollars in the meantime until you find another job.

Can you pay off your student loan early?

Yes, you can pay off your student loan early. There is no prepayment penalty for the early repayment of student loans. However, federal loans have a prepayment status that you must be aware of when pursuing a PSLF.

Those of you who can afford to pay off loans ahead of their term can save a lot of money.


Imagine you have $400,000 in student loans with a 10-year term and an interest rate of 2.5%. Monthly payments of $3,771 over 10 years would add up to $452,496.

Sample student loan

If you can afford larger monthly payments, e.g. B. $5,196 per month, you end up paying ~$26,000 less on student loans.

Should you pay off your student loan early?

Most of the time, it is advisable to pay off your student loans as soon as possible, as mentioned above in reducing the total payout.

The only time you should not prepay your student loans is if you are opting for PSLF or a taxable loan forgiveness. In this case, you cannot reach the loan forgiveness milestone earlier than 10 years or 20-25 years.

Is there a better use of my money?

Many advocate making minimum payment on your student loans, or even entering into forbearance and using all of the money you would invest on your student loans in a retirement account, real estate, mutual funds, or even something more exotic like cryptocurrency.

We encourage you to pay off debt and invest. Read this post to learn more.

Which student loan should be paid off first?

Step 1: If the interest rates are the same between your federal and personal loans, pay off those private student loans first. They have less protection than your federal ones.

Step 2: Start with your loan with the highest interest rate.

Let’s say you have two $25,000 loans with 10-year repayments. The interest rate on loan 1 is 8% and the interest rate on loan 2 is 3%.

Sample student loan

By repaying Loan 1 in five years, the total payout is only $59,383 compared to repaying Loan 2 in five years of $63,351.

That saves $4,168.

Does Student Loan Repayment Help Your Credit Score?

Yes, paying off your student loan can help your credit score. Student loans are listed as installment loans and can go a long way in making or breaking your credit score.

Payments are reported to the three major credit reporting agencies: Equifax, Experian, and TransUnion. Punctual payments contribute positively to your creditworthiness. Late payments, delinquent loans and ultimately delinquent loans are detrimental to your credit score.

Cand do I pay for a student loan with a credit card?

There are definitely people out there who have used a credit card to pay off their student loans. But it’s generally a risky idea because:

  • Credit card interest rates can far exceed student loan interest rates
  • Loss of federal student loan protection
  • transaction fees

Federal Loan Servicers do not allow credit card payments directly unless you use a card service like Plastiq. Private credit service providers may allow you to do this but may charge additional fees.

If you need help deciding the optimal payout schedule for your student loans, meet with!

As we all know, student loans can be stressful and have a significant impact on your financial health and mental wellbeing decades after you graduate from medical school. But I’m here to help you take control of your student loans.

Schedule a consultation with me at and you will be provided with a customized student loan plan that will save you hours of research and stress and potentially hundreds of thousands of dollars. Start the journey to financial independence by letting me guide you through the best student loan options.

Have you started paying off your student loans? How was the process? What do you know now that you wish you knew then about student loans? Comment below!

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