Should I Pay Off My Private or Federal Student Loans First?

Five dollar bill

Flickr user Kurtis Garbutt

If you have multiple students loans from multiple sources, you may be wondering the best way to start repaying your debts. It can be a daunting challenge to even consider tackling.

Should I Pay Off Private or Federal Loans First?

As a general rule of thumb, you should pay off your private student loans first. There are a number of reasons for this. First off, private loans tend to have higher interest rates—and you always want to pay off higher rates first, so they have less time to pile on interest costs. Additionally, federal loans tend to have more flexible repayment plans than private loans, so it’s better to get private loans out of the way first.

Laurel road company logo.

Fixed cap on variable-rate loans

Variable rates from 1.64% - 5.65% APR with auto-debit

Learn More

Consider Refinancing or Consolidating

If you find your loans, terms, and payments are overwhelming, you should consider refinancing or consolidating them.

Refinancing a loan will change the terms, life time, and/or interest rate. You could opt to lower your monthly payments by extending the loan, or pay it off faster with higher monthly payments. It’s a great way to manage the logistics of the loan.

Consolidation, on the other hand, combines multiple student loans into one—so you only have to keep track of one set of terms, one monthly payment, and one interest rate. It’s a helpful simplification option.


Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.88% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.64% - 5.65%*
Fixed APR: 2.25% - 5.75%*
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 1.96% - 7.02%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.44% - 5.97%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 5.33%**
Fixed APR: 2.30% – 5.96%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.84%*
Fixed APR: 2.99% - 4.94%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

Leave a reply

Your email address will not be published. Required fields are marked *