Choosing which student loans to pay off first

Hi everyone,

I'm trying to take advantage of the 0% interest rate on student loans right now by attacking my principal amounts. I'm wondering the best way to approach it--should I focus on one loan or spread out my payment between them?

Here is a snapshot of my loan situation (these are just the unsubsidized ones, I have two subsidized loans as well). I recently put my whole stimulus check towards the top one. 

I think Dave Ramsey recommends the debt snowball approach of only focusing on one, but I wanted to see if there were other thoughts.

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  • I would pay the one that will have the higher rate when the forbearance is over. This will result in less principal being compounded each month when the interest resumes. If they are the same, then it doesn’t matter what you do. 

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    • WordTenor thanks! That makes sense. I can't seem to find what the interest rates used to be, but I know they were almost the same, within a decimal place of each other.

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    • Alemap
    • Everything should be made as simple as possible, but not simpler -Albert Einstein
    • alemap
    • 1 mth ago
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    Good for you! If the interest rates will be the same, focus on the smaller balance. Paying off that one will free up cash flow and give you more flexibility in the future to focus on the other loan and/or emergency funds, etc.

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  • Another vote for starting with the lower balance if the rates are similar. My problem with going after the larger is that the lower ones just hang around taunting me...

    Also, patience, or rather the lack of it. I can knock out a $500 balance faster than a $5000 one and the debt is gone, not just reduced.  

    I suggest paying the minimum + 5-10% if feasible (of the minimum, not the total owed) on the larger loan while throwing everything you've got at the other.

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