Benefits Of Paying Student Loans Biweekly

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If you’re wondering if you can make more than one payment each month on your student loans, then yes, it’s possible. One of the best ways to do it is by switching to biweekly payments. This strategy helps you chip away at your balance more quickly and reduce the amount of interest you’ll pay over the life of your loan.

That being said, biweekly payments aren’t for everyone. According to Bankrate principal writer and student loans expert Andrew Pentis, “Making biweekly student loan payments only really makes sense if you’re trying to pay off your education debt aggressively.”

If your repayment plan is strategically meant to be slow – for example, if you’re pursuing federal loan forgiveness – the benefits of biweekly payments largely disappear. Here’s how biweekly student loan payments work, when they make sense and when paying extra might not be the best move.

Do biweekly student loan payments save money?

Yes, biweekly payments save money by adding one extra payment each year. Instead of 12 full payments, you’ll make 26 half-payments – the equivalent of 13 full payments. That accelerates payoff and cuts down on interest.

The exact savings depend on your loan balance, interest rate and repayment term. Here are examples for a $36,000 loan at 5.5 percent interest, or you can use the Bankrate student loan calculator to do the calculations yourself:

10-year repayment example

You’d save $968.29 in interest and shave 10 months off your repayment.

15-year repayment example

You’d save $1,556.28 in interest and shave 15 months off repayment.

20-year repayment example

You’d save $2,207.91 in interest and shave 20 months off repayment.

Biweekly vs. twice a month: What’s the difference?

Although “biweekly” and “twice a month” sound the same, they’re not.

• Biweekly payments = 26 half-payments per year = 13 full payments
• Twice-a-month payments = 24 half-payments per year = 12 full payments

Paying twice a month can make budgeting easier, but it won’t create that extra payment – so it doesn’t shorten your loan or reduce interest like a biweekly plan does.

When using a biweekly student loan payment strategy isn’t a good idea

Biweekly payments don’t make sense in every situation, Pentis says, especially if you’re on an income-driven repayment plan and are being “strategically slow” with the goal of getting student loan forgiveness.

Here are some cases in which a biweekly student loan payment strategy may not make sense:

• Your budget can’t support it: An extra payment each year may stretch your finances.
• Your loan servicer doesn’t support biweekly payments: Some require manual scheduling of extra payments.
• You’re pursuing federal forgiveness programs: Forgiveness requires a set number of monthly payments – paying biweekly won’t speed up eligibility and could mean paying more than necessary.
• You could lose an autopay discount: Some servicers offer incentives such as a 0.25 discount on your rate if you choose autopay.
• You have higher-interest debt: Paying down credit card debt first may save more money.
• You need to prioritize savings: Building an emergency fund may be smarter than putting extra money toward loans.

How to set up biweekly payments

Setting up biweekly payments isn’t complicated, but the process depends on what your loan servicer allows. Here’s how to get started:

1. Check with your loan servicer.
   • Some servicers allow you to set up automatic biweekly payments directly.
   • If your servicer offers this option, you can schedule it, and they’ll apply the payments automatically.
2. Set up biweekly payments manually.
   • If your servicer doesn’t offer a built-in biweekly option (which is common), you can still do it yourself.
   • Take your monthly payment, divide it in half and pay that amount every two weeks.
   • Two months out of the year will end up with three payments instead of two – that’s what creates the “extra” full payment annually.
3. Make sure payments apply to the principal.
   • Contact your servicer to confirm that extra payments are being applied toward your principal balance, not just credited toward the next month’s bill, and especially not toward unpaid interest. Otherwise, you won’t get the time and interest-saving benefits.
4. Ask about due-date adjustments.
   • Some servicers will let you move your due date if needed, which can make biweekly payments easier to align with your paycheck.

How to budget for biweekly payments

Making payments biweekly means you’ll pay a little extra toward your student loans every year, so you may need to adjust your budget slightly. If you receive paychecks biweekly, try to line up your student loan payments to coincide with receiving your paycheck. That will make it easier to see how biweekly payments affect your monthly expenses.

Once you can compare the biweekly payment against your take-home pay, make sure you have enough income to cover other important bills and expenses. Factor in your rent or mortgage payment, car payment, insurance costs, utility bills and typical living expenses.

Other ways to pay off student loan debt faster

If you’re not sure whether you can afford biweekly payments on your student loans, or if you’re looking for the fastest way to pay off student loans, there are other strategies to consider.

• Make payments every 3 weeks: Making a full payment every three weeks = 17 payments a year. This approach is more aggressive than biweekly payments and helps you pay off debt even faster.
• Consider refinancing student loans: Swap to a lower student interest rate with a private lender and you may be able to make larger payments toward your principal and shorten your repayment timeline. However, keep in mind that you’ll lose federal benefits.
• Enroll in Public Service Loan Forgiveness: Qualify for forgiveness after 120 monthly payments. Note: The Trump administration is working to restrict PSLF.
• Leverage tax refunds: Apply your refund directly to your loan balance for a lump-sum payoff boost.
• Get assistance from your employer: Some employers offer student loan repayment benefits.

Consider other debt payoff strategies

If you have multiple student loans and want to save money or pay off debt faster, you can also use the debt snowball or debt avalanche repayment methods.

• Debt snowball method: With the debt snowball strategy, you make the minimum monthly payment on all your debts. Then put as much extra money as you can toward your smallest debt. As your smaller debts get paid off, you “snowball” those payments toward the next-smallest debt until all your student loans are gone.
• Debt avalanche method: With the debt avalanche method, you make the minimum monthly payment on all your debts, then pay as much extra as you can on the debt with the highest interest rate. As your most expensive debts get paid off, you “avalanche” those payments toward the loan with the next-highest interest rate until all your loans are paid off.

Best Refinance Student Loans

Wondering if refinancing would help you pay down your loans faster? Want to check out current refinance rates for student loans? Check current rates through Bankrate’s list of best lenders.

Check rates now

Bottom line

Paying off your student loan can take years and cost thousands of dollars in interest. If you can adjust your budget and make 26 biweekly payments instead of 12 monthly payments, you’ll be able to pay your student loan off faster and save a significant amount of interest.