Are the interest savings worth the higher monthly expense?
How do repayments work with a 10-year term?
How repayments work with a 10-year loan term depends on the type of loan and repayment plan you have. Most 10-year loan terms come with standardized repayments that remain the same over the life of the loan. However, if you have a federal loan and sign up for a graduated repayment plan, your repayments start lower and increase over time.
A 10-year loan term means your debt is divided up into 120 repayments. This means you’ll pay more per month than you would with a 20- or 25-year term. But since there’s less time for interest to add up, you’ll save more on interest in the long run.
Am I eligible for forgiveness with a 10-year term?
Unfortunately, 10-year loan terms aren’t eligible for the most popular federal forgiveness programs. While you can apply for Public Service Loan Forgiveness (PSLF) after making 10 years of repayments, you’ll technically need to sign up for a 15-, 20- or 25-year income-driven repayment (IDR) plan to qualify.
However, you might be eligible for:
- Teacher Loan Forgiveness. Teachers can qualify to have up to $17,500 in federal student loans forgiven after working for five consecutive years in a low-income school.
- Federal Perkins Loan cancellation. Perkins Loan holders can get up to 100% of their loans canceled by working at an eligible public service, volunteer or teaching job for four to seven years.
- Loan repayment assistance programs (LRAPs). These assistance programs offer partial forgiveness for public and private student loan borrowers in certain fields — especially healthcare workers, public servants and service members — typically after working a few years in an eligible position.
Federal student loans with 10-year terms
There are only two repayment options for federal loans with a 10-year term: the standard repayment plan and the graduated repayment plan. Almost all types of federal loans can qualify for these plans.
|Federal loan||Repayment plans||Maximum annual amount||Current interest rate|
|Direct Subsidized Loan||$3,500 to $5,500 — depending on your year in school||5.05%|
|Direct Unsubsidized Loan||$9,500 to $20,500, — depending on your year in school and including subsidized loans|
|Parent PLUS Loan||100% of cost of attendance||7.6%|
|Graduate PLUS Loan||100% of cost of attendance||7.6%|
|Direct Consolidation Loan||None||Weighted average of your current interest rates|
Private student loans with 10-year terms
Almost all private student loan providers offer a 10-year term. However, it might not be available for higher loan amounts. For example, EDvestinU only offers 12- to 20-year terms for loans of $15,000 or more.
|Student loan provider||Maximum annual amount||Interest rate|
|CommonBond||$500,000||3.2% to 7.25%|
|EDvestinU||$200,000||4.58% to 7.25%|
|Citizens Bank||$295,000||4.07% to 11.81%||Read review|
|SunTrust||$150,000||5.35% to 14.05%||Read review|
|Regions Bank||Cost of attendence||5.74% to 11.85%||Read review|
Compare private student loans
What to consider when choosing a 10-year term
Thinking of getting a 10-year loan term? Here are a few things to consider before taking out that student loan:
- Monthly repayments. A shorter loan term tends to come with higher monthly repayments, which might not be comfortably affordable depending on your income, expenses and loan amount.
- Total loan cost. A 10-year repayment plan can help you lower your overall interest costs if you were considering a longer term.
- Forgiveness options. Federal loan borrowers aren’t eligible for PSLF unless they choose an IDR plan — which all come with longer terms.
- Your future income. You might want to consider a longer or income-based repayment term if you’re thinking of going into a low-paying profession like public service, teaching or the arts.
- Academic plans. You might not be able to afford a 10-year term without applying for deferment or forbearance if you go back to school — which often make your loan more expensive and give you higher repayments after you graduate.
Cost of a 10-year term vs. a 20-year term
We’ve established that a 10-year term costs more in the short run and less in the long run than other options. But what exactly does that mean?
Say you had $30,000 in student debt with a 5.8% APR — the national average in 2017. This is how much you’d pay per month and in total interest with a 10- and 20-year term.
|Loan term||Monthly repayment||Total interest paid|
As the table shows, a 10-year term can cost you less than half of a 20-year loan of the same amount. But the monthly repayments are nearly $120 higher. If you can find room in your budget to afford the monthly repayments, it might be worth the savings.
A 10-year student loan term can help you cut down on the overall cost of your loan and get out of debt faster. But if you plan on applying for forgiveness, going into a low-paying career or are thinking of going back to school, it might not be the most affordable option.
Learn more about how paying off student debt works with our guide to student loans.
Frequently asked questions
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