Should i pay unsubsidized loans first

College Ave respects your inbox and will only send periodic emails. Private student loans typically have higher interest rates than federal student loans, so we suggest you start with paying off private student loans first to save you the most money in the long term. However, there are different methods and approaches for paying off debt, especially if you are looking for a fast approach.

Avalanche Method Pay Off High-Interest Loans First : Paying off your student loans by tackling the ones with the highest interest rates first can help you get out of debt faster.

To use this approach, add up your student loan minimum payments and organize them from highest interest rate to lowest. Based on your monthly budget, determine how much you can comfortably afford to pay beyond the minimum required payments. Continue eliminating debts and rolling those minimum payments into the additional student loan debt until all student loans are paid off. Snowball Method Pay Off Small Loans First : Rather than paying off loans that prioritize the highest interest rates first, the snowball method suggests paying off loans with lower balances first and working your way up.

When the smallest student loan is paid off completely, you roll the money you were paying on that loan into the student loan with the next smallest balance. This can be an effective method for some borrowers because it enables them to pay off accounts in full faster, thus lowering the number of overall payments at a faster rate.

If someone cosigned a loan for you, you may want to prioritize repaying that loan first to assure your cosigner that the debt has been taken care of. If you have a private student loan through College Ave Student Loans, we also have specific tips and suggestions for paying it off.

Most lenders also give you a interest rate discount for enrolling in automatic payments. Once these are paid off, move on to unsubsidized loans with lower interest rates. Unsubsidized loans, on the other hand, start gathering interest as soon as you borrow them. It makes sense, then, to work on paying off these loans first. In addition, you may want to consider student loan consolidation. This advice, however, comes with a few caveats.

First, you should only consolidate your loans if it will end up lowering your overall interest rate. For example, if you have multiple private loans with interest rates above 10 percent, you may want to explore consolidation options.

Second, some consolidation programs lower your interest rates and monthly payment, but they extend the payback period. The best strategy for paying off student loans depends on your situation. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. Getting rid of debt: Tips on how to pay off student loans fast.

Saving money: Tips on how to lower your interest rate on student loans. Decreasing payments: Tips on how to get lower monthly student loan payments. Pay off the student loan with the highest interest rate first. That will save you the most money over time.

But if getting rid of small balances one by one motivates you more, go that route regardless of interest rate. When your goal is to pay off student loans fast , the best strategy is the one that keeps you on track. Private student loans come from commercial lenders, not the federal government.

These loans generally have fewer repayment options or opportunities for forgiveness than federal loans — and higher interest rates. You'll likely want to get any private loans off your plate first. Consider doing the following to help with this:. Refinance at a lower interest rate. There's little downside to refinancing private student loans if you can qualify for a better interest rate.