I have 4 student loans. Two are for roughly $5,000 - one at 4.5% and one at 5.6%. Two loans are for roughly $1,500 and both have an interest rate of 6.8%. Right now I have $1,000 I can put towards my loans - should I pay $500 to each of the higher interest loans (reducing them to $1,000 each) or $1000 towards one of the high interest loans (reducing one to $500 and the other stays at $1,500)?

I will continue to pay the interest on the other loans. What's my best option?


  • This has been answered before: It possible, paying down the one with highest interest rate first will save you money; repeat until paid off. However, if you care less about the cost than about sense of progress, paying off the smallest first will most quickly reduce the number of loans;again repeat until complete. You need to decide which names the most sense for you.
    – keshlam
    Jun 24, 2016 at 1:28
  • Possible duplicate of Student loan payments and opportunity costs I hit enter too fast and it skipped screens and selected this one, but I'm sure there are better fits than this one.
    – Lexi
    Jun 24, 2016 at 1:29
  • 1
    @keshlam OP has already decided to pay off the highest interest, lowest balance loans first. (They are the same in this case.) OP's question is whether or not to pay extra on two loans at the same time, or just one.
    – Ben Miller
    Jun 24, 2016 at 2:24
  • What's your second job? (I mean at Starbucks or the like.) That will affect the answer to the question.
    – Fattie
    Jun 26, 2016 at 3:08

1 Answer 1


In my opinion, it generally makes sense to focus all of your debt-reduction energy and funds on one loan at a time.

There are two reasons for this:

  1. It will allow you to more quickly move from 4 loans to 3 loans, and then 2, and then 1, providing you with a sense of progress and motivation.

  2. As you reduce the number of loans that you have, your monthly minimum payment obligations will be reduced. Then, if you have a month with an emergency expense, you will have more income available to you for your emergency without getting behind on your loans.

There is debate about whether to pay loans in order of the loan balance or in order of interest rate (you can read about this here and here), but in your case, your highest interest loans also have the lowest balance, so either method would have you picking the same loans first.

You have already chosen, wisely, to start with the $1500, 6.8% loans. Send all of your $1000 to one of these loans, and continue to work aggressively to knock out all four as quickly as possible.

  • 2
    I wonder, if there's a slight danger in paying off "all of one loan": could it be that after paying off 1 loan completely, folks tend to celebrate and "buy a jetski" or the like? It would be an interesting psychological study
    – Fattie
    Jun 26, 2016 at 3:09
  • Thank you for your response Ben! I'll pay down one and get that out of the way as soon as possible. Joe, I'm sure some people celebrate like crazy after paying off one loan, but my celebration might be a beer at the bar, not buying a jetski....!
    – E. Zachary
    Jun 27, 2016 at 20:56

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