If you’re ready to start tackling your student debt with extra payments, it’s essential to make sure that money gets applied to the principal of your loan. However, your lender may not make this straightforward, automatically advancing your due date instead.
At first, advancing your due date might sound like exactly what you want to do with your overpayments.
However, we’ll explain why you should not advance your due date. If you’re confused about how to move forward, keep reading for more information about why advancing your due date may do more harm than good.
In this guide:
- What does “do not advance due date” on student loans mean?
- Why should I choose “do not advance due date” on student loans?
- Should I advance my due date just to be safe?
What does “do not advance due date” on student loans mean?
You may see “do not advance due date” as an option when you make an additional payment in advance with the intention of paying down your loan faster. If you choose this option, you’re specifying you want to apply the extra payment right to the principal.
Not choosing that option means your lender will apply your extra payment to late fees and accrued interest, and then toward future payments (including interest), not the principal balance.
It’s important to be aware of how lenders handle these extra payments because yours may not apply the funds with your best interest in mind.
Advance due date on student loans
If you pay ahead, lenders often put the money toward the next month’s payment. Your extra payment is used for outstanding fees or accrued interest before the lender applies it to your loan principal balance.
This will advance your due date equivalent to the months of minimum payments you’ve covered with your overpayment.
For example, say your minimum monthly payment is $200. This month, you want to make an extra payment of $100. Your minimum payment due for next month would then be $100.
If you made an extra $400 payment on top of your minimum, you might choose to advance your due date by two months. Then you wouldn’t need to make your minimum payments for two months since you paid them early.
Do not advance due date on student loans
If you choose the “do not advance due date” option on student loans, your lender will apply your extra payment to the principal.
For example, if your minimum monthly payment is $200, making an extra payment of $400 and selecting not to advance the due date would reduce the principal balance on your loan by $400. You’re still responsible for paying your $200 minimum the following month.
This is also the case if you made an extra payment of $100. By electing to not advance the due date on your student loans, your lender applies the money to your principal balance, and next month’s minimum payment is still $200.
By not advancing the due date on your student loans, you can pay off your loan faster. When you reduce your principal balance, less interest accrues each month.
Why should I choose “do not advance due date” on student loans?
Advancing your due date will keep you on pace to pay off your student loan debt in the set repayment schedule, but it will not allow you to get ahead on your loans. Using your extra payments to advance your due date may seem attractive because it can give you a break from minimum monthly payments, but it isn’t often the wisest financial choice.
Putting extra payments toward your principal balance instead will reduce the interest you pay overall so you repay your loan faster.
To ensure this happens, communicate with your lender that you want the extra money to go toward the principal of your loan. Many lenders won’t do this by default. It might be as simple as checking a box that says “do not advance due date.” Other times, you’ll need to send documentation to your lender to specify how you want it to apply overpayments to your loan.
Say you have a $20,000 loan at 4% interest and a 10-year repayment period. Your minimum monthly payment would be around $200. By making an extra principal payment of $100 per month and choosing the “do not advance due date” option, you’ll save over $1,600 and pay off your loan four years sooner:
| Current | New | Savings | |
| Repayment period | 10 years | 6 years | Reduce payment period by 4 years |
| Interest payments | $4,299 | $2,655 | $1,642 |
| Total cost | $24,299 | $22,655 | $1,642 |
Calculate how much you can save with extra principal payments using our student loan prepayment calculator.
It may be enticing to avoid making monthly payments by moving up the due date, but this method doesn’t affect how fast you’ll pay off your loan. Interest continues to accrue in the months you make additional payments.
If you advance your due date by one month or more:
- It won’t shorten the repayment period.
- It won’t decrease the amount you owe.
This option just allows you to make advance minimum payments. As the borrower, you don’t gain much from it.
We recommend you select the “do not advance due date” option on student loans because it helps you save money and repay your loans faster.
Should I advance my due date just to be safe?
You could advance your due date just to be safe. But the majority of the time, choosing not to advance your due date is the better option.
In cases where you have extra money to put toward your debt, you should prioritize reducing your principal balance above everything else.
This will allow you to save money in interest over the life of the loan and pay off your student loan in less time.
Does it ever make sense to advance your due date on student loans?
We don’t recommend it in most situations, but there are a few cases where it makes more sense to advance your due date on your student loans.
In the special cases listed below, advancing your loan due date can work as a short-term solution. However, advancing your due date shouldn’t be a long-term solution to debt repayment.
If you’re struggling financially and have a windfall
If you get a large sum while struggling to make ends meet, advancing the due date can provide you with peace of mind.
For example, if you just got your tax refund and want to make three months’ worth of payments, you can free up your budget for those subsequent months.
If you’re changing jobs
When changing jobs, you might need to pay your monthly minimum payment in advance since there may be a delay in receiving your paycheck from your new job. This also applies if you switch from a career with higher wages to one with less stability or lower pay.
It may give you peace of mind during the transition to be ahead on your student loan payments until you get used to your new paycheck.
If you have a financial or personal emergency
Financial or personal emergencies such as job loss, medical problems, or other unexpected expenses can make sticking to your budget tough.
In this case, advancing your due date rather than making principal payments may be necessary to avoid falling behind on payments and damaging your credit.
In these cases, it may make sense to advance your due date instead of applying additional payments to your principal.