Pay Off Student Loans Early With These Painless Strategies

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I spend a lot of time thinking about my student loans. In school, I kept a running tally in my head. On my birthdays, I calculate how many years I have left on my payment plan. When I daydream about winning the lottery, the first thing I imagine is paying them all off.her

And yet, the realistic option to pay off student loans early never once popped into my head. It simply didn’t occur to me as a possibility.

Until I started working in personal finance, that is. Suddenly a whole new world of tips and tricks opened up to me. Here’s what I’ve learned about paying off student loans early — and how to do so painlessly.

How to pay off student loans early: 5 basic tips

Sometimes advice about student loans hovers on the unsustainable. People do drastic things — they sell their homes, forego all other financial goals, and essentially stop at nothing to achieve student loan debt freedom.

There’s certainly nothing wrong with that. Laser-like focus on a goal can yield incredible results. That’s why there’s a bonus section on extreme loan repayment ideas below. But first, let’s talk about more practical tips to work into your daily life.

1. Refinance at a lower interest rate

One of the biggest problems with student loans — and any debt, really — is interest. Interest is the reason your debt will cost you much, much more than it did the day you received your loan. It’s the reason you can feel like you’re not making any headway on your balance, regardless of how many payments you make.

That’s why lowering your interest rate as much as possible can help you pay your student loans off faster. The lower your rate, the more of your money you can apply to that principal balance.

In order to refinance, all you have to do is collect offers from refinancing lenders. Then you’ll select the best one for you. Each lender will show you a variety of interest rates (variable and fixed) and a variety of repayment terms.

Want to see it in action? Let’s say you have $60,000 in student loans with a 7.00% interest rate and 10 years left. Then you’re approved for a refinance with the same 10-year plan, but a 4.90% interest rate. Take a look:

pay off student loans early

Using our refinancing calculator, you can see the new loan saves you more than $7,000 overall. It also lowers your monthly payments by $61. Not bad!

Just remember: If you choose a longer repayment term, you can lower your payments even more. However, it’ll keep you in debt longer. If your main goal is to pay off the debt faster, choose a shorter repayment term if you can afford the monthly payments.

2. Make biweekly payments

Making biweekly payments is a tactic that not a lot of people know about, but can be super powerful. Here’s how it works:

  • Split your monthly payment in half.
  • Pay that amount every other week.
  • Make sure your first two payments occur before your next due date. That way, you avoid accidentally paying less than the amount due.

When you do this, you’ll end up making one full extra payment per year. And that extra payment can save you a lot more than you might think.

As an example, let’s say the following numbers represent your current student loan debt:

  • Current balance = $60,000
  • Interest rate = 5.00%
  • Time left on repayment = 120 months

Calc XML has a biweekly payments calculator that’s built for mortgages, but it can also give you an idea of what kind of savings you’d get on your student loans. Using the calculator for these numbers, here are your results:

  • By paying half of your monthly amount every two weeks, you’ll pay an extra $636 per year.
  • That extra payment will save you $1,773 in interest.
  • Those savings will enable you to pay your loans off approximately 11 months early.

how to pay off student loans early

There is one caveat: Some student loan servicers don’t apply extra payments to the balance but pay the account forward instead. It’s important to make sure the extra payment is going to the balance.

You can make sure your payments are applied correctly by logging into your account and setting your preferences for extra payments. You can also call your servicer directly and ask them how to do this.

3. Utilize student loan repayment assistance programs (if possible)

Depending on where you live, what you do for a living, and for whom you do it, you might be eligible for a student loan repayment assistance program (LRAP).

LRAPs help you repay your loans, almost like a grant. They can provide you relief on your payments if you qualify — but if you utilize those plans and keep paying down your loans anyway, then you can make significant progress on retiring your debt.

And if for some reason making those payments interfere with your LRAP, you can always put your own money towards monthly payments in a separate bank account. Then, when the LRAP is finished, you can use the money in the account to make one giant bulk payment on your loans.

4. Employ the debt avalanche method if you have more than one loan

If you have a variety of loans and interest rates, you can pay them off faster by employing specific debt payoff methods. There are two popular methods — debt avalanche and debt snowball — but the debt avalanche method is the best for speedier debt repayment.

Here’s how it works:

  • Rank your loans from highest interest rate to lowest.
  • If you have extra to apply to your loans each month, apply it to the loan with the highest interest rate.
  • Once you pay off one loan, add what you were paying on it to the minimum payment on your next highest loan.
  • Keep rolling these payments onto your next loan, never decreasing how much you pay each month on your loans until they’re all gone.

Here’s an example. The details below assume you have 10 years left on three student loans:

  • Loan One has a $20,000 balance, 4.50% interest rate, and $207 monthly minimum.
  • Loan Two has a $10,000 balance, 6.00% interest rate, and $111 monthly minimum.
  • Loan Three has a $30,000 balance, 5.50% interest rate, and $326 monthly minimum.
  • That makes a total of $644 due per month, which you decide to increase to $700.

Here’s how the debt avalanche would work:

  • Loan One and Three get their minimum payments.
  • Loan Two gets the minimum plus $56, which is the additional money you added when you upped your total monthly payments from $644 to $700.
  • Once Loan Two is paid off, you’d roll over its payments ($111 + $56) to Loan Three’s minimum payment, equaling $494.
  • And once Loan Three is paid off, Loan One gets the entire $700 monthly payment until it’s paid off and you’re free of student loan debt.

So how much can this save? Using, making just the minimum payments would free you from debt in July 2027. But adding the $56 and using the debt avalanche method would result in you knocking out Loan Two in June 2023. And you’d be completely out of debt by June 2026 — 13 months early.

pay off student loans early

how to pay off student loans early

As for debt snowball, it focuses on paying your smallest balances first. This is certainly good for motivation, but it won’t always be as useful in paying your debt off faster.

5. Apply bonuses, birthday money, and tax refunds to your loans

Another way to win the fight against high interest rates is to make large extra payments that go straight to your principal balance. And what better way to do that than with money that you weren’t planning on having in the first place?

And if you really don’t like the idea of giving up hard-earned bonus money, birthday cash, or tax refunds to your student loans, then you can always split it up. Assign some percentage of extra money to your student loans, and then do whatever you please with the rest.

Bonus: Extreme student loan debt repayment methods

Now, let’s dig into some more extreme student loan repayment methods. In short bursts, they might help you make a huge amount of progress.

Decrease your expenses as much as possible

The first thing is to evaluate your lifestyle. What are you willing to get rid of?

For example, you could downgrade your home, apartment, or car. You could cook more and eat out less. Even a short-term shopping ban can help.

Once you’ve decided how to decrease your expenses, apply all the extra money to your student loans.

Add all pay increases or extra money in your budget to your loans

Recently get a pay raise? Congratulations! Instead of using it to upgrade your lifestyle, why not put all the extra cash straight towards your student loan debt?

Bonus: Once your student loans are paid off, you’ll feel like you got a raise twice. That’s because you’ll then get to use your pay raise for other things and get another bump from not having those monthly payments anymore.

Sell physical assets you don’t need

Look around. Do you own assets you could live without, such as a house with a mortgage when you could rent, or a car when you could bike?

If you sell them and apply the money to your student loans, you can knock a ton of time off your repayment.

But first, evaluate the long-term consequences to be sure this won’t cost you more money later. Examples of this could include paying more to re-enter a suddenly hot real estate market or spending more on taxis than you did on car payments.

Why you should pay off student loans early

Federal student loan interest rates are currently hovering between 4.45 to 7.00%, according to the Office of Federal Student Aid. Private student loan interest rates can vary quite a bit, but FinAid is showing them to be as high as 12.88%.

That’s why paying off your student loans early can be so beneficial. Those interest rates can drastically increase your overall debt load by the time you’re finished with your original repayment plan.

As you can see from the examples above, there are many ways to release yourself from the chains of student loan debt before your repayment plan would have you do. But choosing the right strategy is all about you.

Choose the variety of methods that match up with your lifestyle. Following a financial principle because it sounds like a good idea won’t be helpful if you find that you can’t or don’t want to maintain it.

Remember, personal finance needs to be personal to be effective. Create a strategy you can feel good about, and you’ll be sure to reach success in the end.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at, or call 888-601-2801 for more information on ourstudent loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.899% APR to 8.179% APR (with AutoPay). Variable rates from 2.570% APR to 6.980% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. SoFi rate ranges are current as of September 14, 2018 and are subject to change without notice. See APR examples and terms. Lowest variable rate of 2.570% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.740% margin minus 0.25% AutoPay discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.

5 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.57%-8.17% (2.57%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.57% – 6.98%3Undergrad
& Graduate
Visit SoFi
2.47% – 5.87%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.80% – 6.22%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.57% – 8.17%6Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.