Can I use a credit card to pay off my student loans?

The rewards are great in theory, but it could end up costing you more in the long run.

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Paying off your student loans with a credit card can help you rack up points or take full advantage of a 0% APR promotional period. But it’s rare for a student loan servicer to accept credit card payments directly. In fact, it might end up costing you more in the long run.

Can I make student loan repayments with a credit card?

Some private student loan servicers accept credit card payments. But you can’t use your credit card to pay off federal student loans — at least not directly. Many private student loan providers also have similar restrictions.

Can I use my points to pay off student loans?

You can if you have a cashback credit card. Some like the Sallie Mae Accelerate card allow you to use your rewards to directly pay off your student loans — and gives you bonus points to do so. Otherwise, you can use the money you earn with a cashback rewards card to pay off your student loans yourself.

Read our review of the Sallie Mae Accelerate credit card

Why use a credit card to pay off student loans?

There are two main reasons to pay off your student loans with a credit card: to earn points or save on interest.

Earn points

Student loans come with a payment you have to make each month any way — so why not get cash back or a free hotel in the process? If you earn cash back, you can then put those savings toward your student loan payments to get out of debt faster.

Save on interest

Many balance transfer credit cards come with a 0% APR promotional period — usually for anywhere from 12 to 21 months. Moving some of your student loan debt onto that card could seriously reduce the amount of interest you pay and help you get out of debt faster.

Just make sure it’s an amount you can afford to pay off before the full revert interest rate kicks in. Otherwise, you’ll pay significantly more in interest on that amount.

Are there any drawbacks?

While earning points on your student loan repayments sounds great, there are several roadblocks to actually saving on your debt.

Most lenders don’t accept direct credit card payments

Only one of the main student loan servicers accepts credit card payments. And even in that case, not all lenders are eligible.

Payment services aren’t free

Most likely, you’ll need to use a third-party service like Plastiq to make a payment. These typically come with a 2.5% fee per credit card transaction. Unless you earn points worth more than 2.5% of the transaction, you’ll actually lose money.

Read our review of Plastiq payment service

You’ll lose the autopay discount

Most student loan servicers offer a 0.25% interest rate discount for signing up to have payments automatically debited from your bank account each month. You’ll lose this if you opt to pay with your credit card.

Risk paying high rates

If you don’t pay off your credit card bill in full, you’ll generally have to pay interest on your student loan repayment. Student loans typically come with rates starting around 4%. Credit card rates typically start around 15% — and can be higher if you’re just building your credit profile.

How do I make student loan repayments with a credit card?

There are two ways to repay your student loans using a credit card. If your lender allows it, you can make payments directly to your servicer — the company that handles your student loan repayments, not your lender. Otherwise, you’ll have to go through a third-party company.

How to make a direct credit card repayment

This is the easiest option. First, reach out to your servicer’s customer service team to ask if your loans are eligible for credit card payments. If they are, follow their directions to pay online or through the app. Otherwise, look into third-party services to make repayments.

How to make an indirect credit card repayment

More likely than not, you’ll have to use a third-party payment service if you want to use your credit card. This involves making a credit card payment to another company, which pays your servicer through direct deposit.

Here’s how it generally works:

  1. Create an account with a third-party payment service.
  2. Enter your credit card information.
  3. Enter how much you’d like to pay and your servicer’s direct deposit address.
  4. Click submit.

Does my servicer accept credit card repayments?

Not all servicers accept credit card payments. And even those that do only accept them for specific lenders.

Servicers that accept credit card repayments

Currently, Firstmark Services is the only major servicer that accepts credit card payments — as long as your lender also allows you to make repayment by credit card.

Read our review of Firstmark student loan servicer

Servicers that don’t accept direct credit card repayments

You’ll have to sign up for a third-party payment service with the following servicers:

  • American Education Services (AES)
  • MOHELA
  • Nelnet
  • Kentucky Higher Education Student Loan Corporation (KHELSC)
  • Granite State Management
  • Launch Servicing
  • University Accounting Service (UAS)
  • Sallie Mae

Check out reviews of 15+ student loan servicers

Can I change my servicer to make credit card repayments?

You can by refinancing your student loans with a private lender. But make sure that the lender allows its servicer to process credit card repayments before you sign up.

4 more ways to save on your student loans

If making repayments with a credit card isn’t going to work for you, here are a few other ways to save:

  • Refinance your student loans. Refinancing with a private lender can help you save on interest — especially if you work in a high-paying field and have strong credit.
  • Adjust your loan term. Go through your budget regularly to find out how much you can afford to put toward your student loans. If you can afford more, ask your servicer to shorten your term to save on interest.
  • Put extra money toward your loans. Putting extra bonuses, cash gifts and pay raises toward your student loans can help you pay down your balance faster.
  • Apply for forgiveness. Look into forgiveness and repayment assistance options available to borrowers in your profession. You might have to wok a low-paying job for a few years, but you could wipe out some or all of your student debt.

Compare student loan refinancing offers

Updated April 6th, 2020
Name Product Min. Credit Score Max. Loan Amount APR
Figure Student Loan Refinancing
680
$250,000
4.25% to 6.32%
Enjoy no fees, low rates and flexible terms — but only for borrowers with good credit.
Splash Financial Student Loan Refinancing
660
None
Starting at 2.27%
Save on your student loans with this market-leading newcomer.
Credible Student Loan Refinancing
Good to excellent credit
None
Starting at 2.21%
Get prequalified offers from top student loan refinancing providers in one place.
Education Loan Finance Student Loan Refinancing
680
None
3.50% to 6.01%
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing Variable Rate (w/ autopay)
650
None
3.5% – 8.72%
Get a tailored interest rate and repayment plan with no hidden fees.
SoFi Student Loan Refinancing Variable Rate (with Autopay)
650
Full balance of your qualified education loans
3.5% to 8.7%
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Purefy Student Loan Refinancing (Variable Rate)
620
$300,000
2.27% to 7.49%
Refinance all types of student loans — including federal and parent PLUS loans.
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Compare up to 4 providers

Bottom line

Using a credit card to pay off your student loans can, in theory, help you save. But in reality, most lenders don’t accept direct credit card payments — and the cost of using a third-party payment service can offset the savings. You also risk paying more in interest if you can’t pay off the credit card within the 0% promotional period.

Explore more ways to save on your student loans with our guide.

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