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Biweekly Student Loan Payments Knock Out Debt Faster

June 27, 2018
Loans, Student Loans
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Scheduling biweekly student loan payments makes it easier to pay off debt faster and save on interest — without even realizing it.

This strategy is perfect for people who want to pay extra on their student loans but feel like they don’t have spare cash to do it. Here’s how biweekly student loan payments work — and how to make them count.

Paying student loans biweekly

By paying half of your monthly payment every two weeks, you’ll end up making an extra payment each year. You’ll also shave months or years off your loan term, and hundreds or thousands off your total interest payments.

Say you owe $30,000 in student loans with an average interest rate of 7%. Over a standard 10-year repayment period, you’d be making monthly payments of $348. If you instead make $174 payments every two weeks, you’ll be debt-free 13 months sooner and save $1,422 in interest.

How does this work? On a biweekly payment schedule, you make 26 half-payments per year — 52 divided by two — rather than 12 full monthly payments. In this example, you’d end up paying $4,524 per year on a biweekly schedule instead of $4,176 on a monthly schedule.

Biweekly payment calculator

How to pay biweekly

If you get paid biweekly, your paychecks and payments will align and make it easier to budget for twice-per-month payments. Here’s how to do it.

  1. Check with your lender or loan servicer. See if it’s possible to set up biweekly student loan payments via autopay — some allow it, some don’t. For example, two major federal loan servicers, Great Lakes and Navient, do not. Earnest, a student loan refinancing company, does. You can still make biweekly payments if your lender or servicer doesn’t have biweekly autopay, but you’ll have to do it manually.
  2. Give instructions about how you want extra payments applied. On a biweekly payment schedule, there will be two months in which you make three half-payments. In those cases, ask your lender to apply the extra amount to your loan balance instead of the next month’s payment — that’ll help you pay down the debt faster.
  3. Mind your due date. To avoid late fees, make both biweekly payments before each monthly payment due date. Some lenders and servicers let you change your due date — if that’s possible for you, choose a date that aligns with your pay schedule.
  4. Consider alternatives. If you can’t set up biweekly payments, either because your lender doesn’t allow it or your pay periods don’t align, try dividing your monthly payment by 12 and adding that amount to each monthly payment.

More ways to get ahead of student debt

If biweekly student loan payments aren’t for you, or if you want more ways to accelerate repayment, try these strategies:

  • Pay extra. Whether you throw lump-sum payments at your debt every so often or consistently make higher-than-minimum payments, paying extra is the key to being debt-free faster. NerdWallet’s extra payments calculator shows you how paying even a little bit extra can shave months or years off your repayment schedule.
  • Student loan refinancing. If you have good credit and a stable income, and are comfortable giving up federal loan benefits, you could get a lower rate by refinancing your student loans. With a lower rate, you can maintain your current monthly payment amount and still become debt-free faster.

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