Set Up Automatic Debt Payoff Plans

Quick Look

  • Do one of the following:
    • Set Up from Lender: Go to your lender’s website and provide the necessary information for your lender to withdraw your regular payment from your other account. (Typically you’ll either link your account directly or provide your checking account number and bank’s routing number.) For student loans, see “Pro Tip” below.
    • Set Up from Bank: Set up a regular automatic transfer from your bank to your lender.


Set Up From a Lender or a Bank

Do either of the methods described in the Quick Look section above set up an automatic payment. This automation will make it easier to make progress toward paying off your debt. Here are a few tips to optimize this process.

There’s a peace of mind that can come from having your debt set up to be paid automatically and on time.

Tips for Your Automatic Debt Payoff

  • Time Your Payment: Make your payment at a time of the month that works well for you. You’ll get your statement at the same time each month but there will be a window between the statement arrival date and the payment due date, sometimes up to a month. And you can set up your automatic payment for any time in that payment window.Consider setting your payment to come immediately after you get a paycheck, or in the middle of the month when you don’t have other bills to pay. Whatever time you set just make sure it works for you.
  • Make Your Payment Round: By this we mean, if your monthly payment is supposed to be $237.45, consider rounding that number up to $250 or even $300 if you can. Not only will this small round up mean you’ll pay off your debt a little faster, it will also be easier to mentally calculate how you’re tracking on your monthly goals or whether or not you’ll have enough in your account to pay the amount due on the required date. When it comes to personal finance, simple math is almost always better.
  • Student Loan Pro Tip: If you set up an automatic payment for your student loan, many lenders will actually reduce your interest rate by 0.25% just for setting that up. This means more of your money can go toward paying down the principle you borrowed instead of paying interest to the lender. Even if your lender doesn’t advertise this benefit, call them an ask anyway! Simply say, “I’ve heard that some lenders will reduce the interest rate if I set up an automatic payment. Is this something you do too?”

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