Top 10 Tips for Repaying Your Student Loans

Successful repayment of your student loans can be the foundation for a strong credit history—and a bright financial future. Try these 10 tips for success:

  1. 1) You don’t have to wait until after graduation. Making even small payments while in school can help lower the amount you’ll pay over the life of the loan. That’s because you’ll lower the amount of unpaid, accrued interest that gets “capitalized” – or added to your balance.
  2. 2) Make a list of your outstanding student loans. If you know which loan is due when (and how much), you’re less likely to be late with a payment. Keep good records for each of your student loans, including contact information for making payments. For federal loans, this information is available at For private loans, check your credit report or contact your servicer.
  3. 3) Keep your servicers updated with your current contact information. Contact your servicer whenever you change your street address, email address, or telephone number. Sign up to receive email communications from your lender. It’s an easy way to receive important information about your loans and cut down on paper clutter while you help the environment!
  4. 4) Select the repayment plan that’s right for you. You have a wide range of repayment options for your federal loans, including graduated repayment (payments are lower when you’re just starting out and then gradually increase) and, if you qualify, extended repayment and income-based repayment. Depending on the terms of your loan, temporarily reduced or extended payment options may be available on private student loans as well. Be sure to compare your monthly payments and total loan costs under different repayment options so you can make an informed choice.
  5. 5) Start off on the right foot with on-time payments. Making your loan payments on time can help you build and maintain a good credit rating — and avoid the extra expense of late fees. Develop good repayment habits right from the start.
  6. 6) Sign up for automatic debit. Don't want to worry about having to remember to make your payment every month? Consider having your loan payments automatically deducted from your bank account. You just have to set it up once. This can be a good way to ensure your payments are made on time (which can help you build a good credit rating – see #5 above). Some lenders even offer interest rate reductions when you make on-time payments through their automatic debit plans — it's worth checking out!
  7. 7) Consider paying extra each month. Paying extra each month can go a long way toward helping you pay off your loans faster. If you have more than one loan at different interest rates, consider applying the extra toward your highest-rate loan.
  8. 8) Make your life easier by managing your account online. Sign up for online account management (if offered by your servicer). If, like most people, you spend a lot of time online, this might make managing your loan more convenient. Online account management means that you can easily review your payment history, make a payment, update your contact information, and more.
  9. 9) Seek help at the first sign of financial difficulty. Financial problems have a tendency to worsen if they’re not addressed promptly. Call your servicer at the first sign you’re having trouble, and get advice from your cosigner or other trusted family members or friends. Non-profit credit counseling services also offer free budgeting assistance.
  10. 10) Use deferment and forbearance as a last resort. For all but need-based (or “subsidized”) federal Stafford loans, putting off your full payments through “deferment” or “forbearance” will cost you more. Use these options only if absolutely necessary. And before you use these options, make sure you understand the time limits, how your payment might increase in the future, and the total additional cost. repayment amounts for consolidated loans.