Which loan should I put the extra money against?
Highest rate first against smallest balance first, run to the end, so you can see what the difference actually is before choosing on feel.
Against clearing the smallest balance first, over the whole payoff. That is the entire financial difference between the two strategies on these numbers.
- $19,401.63Highest rate first, interest
- $19,416.08Smallest balance first, interest
- 7 yearsHighest rate first, time
- 7 yearsSmallest balance first, time
| Loan | Highest rate first | Smallest balance first |
|---|---|---|
| Undergraduate unsubsidized | 7 years | 6 years and 8 months |
| Graduate unsubsidized | 6 years and 11 months | 7 years |
| Private loan | 6 years and 1 month | 6 years and 1 month |
Why this site does not pick one for you
Highest rate first always costs less, by definition. Whether it costs enough less to matter is what the figure above is for. Clearing a whole loan early is worth something real to some people and nothing to others, and that is not a number this or any calculator has.
The two orderings
Every loan gets its minimum. Whatever is left over goes against one loan, and the only question is which. Highest rate first minimises interest, always, because interest is what a rate charges. Smallest balance first clears individual loans sooner, which some people find makes the difference between keeping going and not.
Why the gap is usually smaller than the argument
The strategies only diverge where the highest rate and the smallest balance are on different loans, and even then the extra payment is doing most of the work either way. The figure this page shows is the whole financial difference. If it is small, the argument is not really about money.
Sources
- Interest Rates for Federal Direct Loans First Disbursed Between July 1, 2026 and June 30, 2027 (GENERAL-26-33), U.S. Department of Education, Federal Student Aid. Checked on . Backs the 6.52%, 8.07% and 9.07% rates for 2026-27; the statutory add-ons and caps; the 12 May 2026 Treasury auction high yield of 4.468%.
- Interest rates and fees for federal student loans, U.S. Department of Education. Checked on . Backs the 1.057% and 4.228% origination fees; that the published fees run only to 30 September 2027; the 5% rate on outstanding Perkins loans.
- Repayment plans and important definitions, U.S. Department of Education. Checked on . Backs the annual and aggregate borrowing limits from 1 July 2026; the $20,000 annual and $65,000 aggregate Parent PLUS caps; the $257,500 lifetime maximum for a student borrower; proration of annual limits for part-time enrolment; the 1% automatic debit reduction and its June 2028 expiry.
The rules behind this calculator were last checked on .
Related
What will my monthly payment be?
A fixed payment over a fixed term, with the interest it costs over the whole loan, and what putting anything extra against the principal does to both.
What rate would a consolidation loan carry?
The weighted average of your loans, rounded up to the next eighth of a percent as the Department rounds it, which is why consolidating is never quite rate-neutral.