Student Loan Repayment Question

[Anonymous]

I have several student loans from the same lender, all with the same interest rate. What makes more sense: paying off the higher balance or lower balance loans first?

[Anonymous]

No difference.

[Anonymous]

I would pay off the lower balance first - psychologically it may feel nice to have it off your plate!

[Anonymous]

The higher balance because more interest is accruing on that loan than the lower balance.

[Anonymous]

Lower first - once you pay it off your monthly payment due will be lower, so you'll have more cash on hand to pay off others

[Anonymous]

There's probably a decent equation that can be written to figure out which is better based upon how much you owe in each, the current monthly payments, interest rate, and what you intend to add to the payment to pay it off.

But, as a rule for figuring it out, figure out how much extra you would pay per month, add it to the smaller loan, and then figure out how quickly that one will be paid off. Then, add the entirety of the smaller loan plus extra payment to the larger loan and figure out when that will be paid off. For comparison do the opposite.

It may feel better to pay the smaller one first b/c then you will have one payment and more flexibility. If you pay the larger one first you will continue to have two payments longer.

Also, make sure your extra goes to principal payments not early payments.

[Anonymous]

The loan with the highest principal amount, since that will compound the largest amount of interest everyday.
Make the minimum payments on all loans, but put any extra amounts toward the largest loan to eat away at that principal amount quicker.

[Anonymous]

If you own and have equity, refi and pull money out of your house to pay Loan in full. Then you'll be able to deduct it in full (unless the laws have changed). You can pay a lower amt and drag it out or make extra payments to principle to pay off earlier. This is what we did. Paid off an $85,000 loan early and saved on taxes.

[Anonymous]

Anonymous wrote:The loan with the highest principal amount, since that will compound the largest amount of interest everyday.
Make the minimum payments on all loans, but put any extra amounts toward the largest loan to eat away at that principal amount quicker.

OP here. This is what I was figuring was the smart choice, although it would feel nice to knock out some of the lower balance ones first. But when I see how high one of the loans got through interest accruing while I was in school versus the original balance, I really want to knock the higher balances out first. I took my account off paid ahead status, but it doesn't matter that much because my plan is to get it paid down then request a pay off on the loan when it's close to paid off.

[Anonymous]

Anonymous wrote:The loan with the highest principal amount, since that will compound the largest amount of interest everyday.
Make the minimum payments on all loans, but put any extra amounts toward the largest loan to eat away at that principal amount quicker.

Federally-backed student loans use simple rather than compound interest. It makes no difference what you pay first.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The loan with the highest principal amount, since that will compound the largest amount of interest everyday.
Make the minimum payments on all loans, but put any extra amounts toward the largest loan to eat away at that principal amount quicker.

Federally-backed student loans use simple rather than compound interest. It makes no difference what you pay first.

They're private.