How Long Does It Take to Pay Off Student Loans?

Ben Luthi

For some people, student loans can feel like a life sentence. But how long does it take to pay off student loans, really? It depends on the type of student loans you have and the repayment plan you chose.

The good news is that, depending on your financial situation, you may have more control over how long to pay off student loans than you think. Here’s what you should know about student loan repayment terms and your options with them.

How long does it take to pay off student loans?

If you have private student loans, your repayment term is set by the lender when you were first approved. Each lender has its own set of repayment terms, and your options can vary based on how much you borrow, the type of loan you’re getting, your creditworthiness and more.

In general, you can expect private student lenders to offer repayment terms between five and 20 years.

With federal student loans, all borrowers start out with the standard repayment plan, which is 10 years. But if you can’t afford your monthly payment on the 10-year plan, you’re consolidating multiple loans into one, or you’re applying for Public Service Loan Forgiveness, you may choose a different repayment plan. Here are the options:

  • Graduated repayment plan: Monthly payments start out low and increase over 10 years unless you have a Consolidation Loan, in which case your term can range from 10 to 30 years.
  • Extended repayment plan: Monthly payments are fixed or graduated over 25 years.
  • Revised Pay As You Earn (REPAYE) repayment plan: Monthly payments are 10% of your discretionary income over 20 or 25 years, depending on the type of loans you have.
  • Pay As You Earn (PAYE) repayment plan: Monthly payments are 10% of your discretionary income over 20 years.
  • Income-Based Repayment (IBR) plan: Monthly payments are 10% or 15% of your discretionary income over 20 or 25 years, depending on when you first started receiving your loans.
  • Income-Contingent Repayment (ICR) plan: Monthly payments are 20% of your discretionary income over 25 years or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income, whichever is less.

If you’re wondering more specifically, —how long will it take to pay off my student loan?” check with your lender or servicer to see which repayment plan you’re on. Then subtract the number of years and months you’ve been making payments from the original term length to determine how much time you have left.

You may be able to check how much longer you have through your online account, or you can call customer service and speak with a representative.

How to reduce your repayment term or monthly payment through refinancing

If you have federal student loans, you can change your repayment term by consolidating your loans with a different servicer or choosing a different repayment plan. But the U.S. Department of Education doesn’t offer a way to choose a shorter repayment term than the one you already have.

If you’re hoping to pay off your student loans faster, you can always add extra payments each month. But if you want to add more structure than that, consider refinancing them with a private lender.

Again, private student loans typically offer repayment terms between five and 20 years. So alternatively, if you want to reduce your monthly payments, you can also refinance your loans with a longer repayment term. Here’s what both scenarios look like.

Refinancing with a shorter term

Let’s say you’re on the standard repayment term, and you want to pay off your debt faster. Your current loans amount to $20,000 and have a weighted-average interest rate of 6%. A refinance loan offers the same interest rate but with a seven-year term instead of 10 years.

In this scenario, your monthly payment would increase from $222 to $292, but you’d shave off $2,103 in interest — not to mention you’ll be debt-free a full three years sooner.

This option may be a good idea if your credit is in good enough shape to qualify for a similar interest rate or even a lower one, and you can afford the higher monthly payment.

Refinancing with a longer term

If you’re struggling with your current monthly payment, refinancing can help you get a lower one. For example, let’s take the same loan information from above, but extend the repayment term from 10 years to 20 years.

In this scenario, your monthly payment would drop from $222 to $169, making your debt more affordable. At the same time, however, the total interest charges would increase by $3,734. So while you’ll increase your monthly net cash flow, you’ll end up losing a lot more money over the long run.

Consider this option only if you don’t have any other way to afford your monthly payments, and think about it more as a temporary solution than a permanent one. If you can afford higher monthly payments in the future, it may be a good idea to make additional payments or refinance again with a shorter term to save on interest.

What to consider before refinancing?

As you’re thinking about how long to pay off your student loans and using refinancing to shorten or lengthen your repayment plan, here are a few things to consider before you pull the trigger:

  • You’ll need a solid credit history: Unlike the federal government with most loans, private student lenders will run a credit check when you apply. If your credit and income aren’t in good shape, you may not qualify for a low enough interest rate to make refinancing worth it, and you may not even qualify at all.
  • You may be able to apply with a cosigner: If your creditworthiness isn’t strong enough on its own, you may be able to apply and get approved with a cosigner. Just keep in mind that cosigners are equally responsible for paying off your loans, so it could damage your relationship if you can’t afford your payments down the road.
  • Private lenders don’t offer federal benefits: The Department of Education offers income-driven repayment plans, access to loan forgiveness programs and generous deferment and forbearance policies. If you think you may want to take advantage of any of those, avoid refinancing your federal loans with a private lender.

As you consider whether refinancing is the right path for you, shop around using Purefy’s rate comparison tool to make sure you get the best terms that you qualify for. Also, consider looking at more than one repayment term to find the right fit for your budget and desire to be debt-free.

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