The Power of Extra Payments

Every extra dollar you send to a student loan shortens the term and reduces interest — because interest is charged on the outstanding balance, paying principal early permanently removes that interest forever. An extra $100 per month on a $30,000 loan at 6.5% saves roughly $4,000 and ends the debt more than 2 years sooner.

Understanding Your Amortization

Early payments are mostly interest — on a 10-year $30,000 loan at 6.5%, the first payment is about 54% interest. Each month the interest share shrinks as the principal falls. This is why acceleration matters most in the early years: paying down principal early skips the highest-interest portion of the schedule.

Choosing Your Strategy

Attack the highest-rate loan first (avalanche) for maximum savings, or the smallest balance (snowball) for momentum. Either way, apply extra payments to a specific loan — not spread across all of them — and target the principal, confirming your servicer applies overpayments to principal rather than advancing the due date.