Student loan payoff
What does an extra hundred a month actually buy you?
Federal student loans are typically 4–7%. Private 5–12%. Throwing an extra payment at the principal each month can shave years off and thousands in interest — but it's also money you're not investing. Here's the math on both sides.
What the extra payment buys you
Interest saved
$5,110
58 months sooner
Without extra: $11,693
With extra: $6,583
Same extra, invested at 7%
$30,582
over 11.6 years
Opportunity cost of paying down vs. investing.
Rule of thumb
Above ~7% interest, paying it down usually wins. Below 7%, investing usually does. Yours: 6.0%.
On an income-driven plan (IDR / SAVE)? Different math — your minimums are tied to income, and forgiveness can change the calculus. Worth a counseling conversation if so.
Talk through what's right for you