Pay Off Student Loans Early With These Painless Strategies

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Once the college graduation celebrations end and your cap and gown go back in the closet, you might feel like you can leave all your school woes behind. That is, until your first student loan payment is due.

But it is possible to pay off student loans early and free up your budget to cover other expenses and save for your future. Your options include refinancing your loans, making additional payments and using student loan repayment assistance programs. Here are several strategies to pay off student loans early.

How to pay off student loans early: 5 basic tips

Some borrowers take extreme measures to pay off student loans: They sell their homes, forgo all other financial goals or cut expenses drastically. While laser-like focus on a goal can yield results, there are also more practical tips for fast loan payoff that you can work into your daily life. Try these strategies:

1. Refinance to a lower interest rate

Interest makes your loans cost much more than they did the day you received them. 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 by refinancing your student loans can help you pay off your education debt faster. The lower your rate, the more money you can apply to that principal balance.

Start by making sure you’re eligible for refinancing, based on your credit and income, and then compare options across multiple lenders. If you qualify, you may receive offers with a variety of interest rates — variable rates, which can change over time, and fixed, which don’t — and a variety of repayment terms.

Let’s say you have $60,000 in student loans at a 7% interest rate and 10 years left to repay. When you’re approved to refinance on a 10-year repayment plan, but at a 4.9% interest rate, you could save more than $60 per month and more than $7,500 overall.

Use our Student Loan Refinancing Calculator to see how much you can save. If you choose a longer repayment term, you can lower your payments even more — but that will keep you in debt longer and reduce your interest savings. If your main goal is to pay off the debt faster, choose the shortest repayment term you can afford.

2. Make biweekly payments

If you use the tactic of making biweekly payments, you would make one extra payment per year and cutting the amount of time it takes to repay loans overall. 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 the equivalent of one full extra monthly payment per year. And that extra payment could save a lot more than you expected, since you’ll chip away at your balance faster.

Generally, when you pay extra towards your student loan payments, lenders put that payment towards any fees first, then interest and lastly your principal. But your loan servicer may apply your extra payments to future loan bills, known as putting your loans into “paid ahead” status. Speak to your servicer to make sure your extra payment is, in fact, going towards your principal balance, which will have the largest impact, and not covering future payments.

3. Utilize student loan repayment assistance programs, if you qualify

Depending on where you live, what you do for a living and whom you work for, you might be eligible for a Loan Repayment Assistance Program (LRAP).

LRAPs award you money each month that goes toward your loans. They can provide you relief on your payments if you qualify. If you utilize those plans and also put extra toward your loans, you can make significant progress on getting rid of your student debt.

If making your own extra payments interferes with the terms of your LRAP, consider saving that money in a separate bank account. Then, when the LRAP is finished, you can use the savings to make one giant bulk payment on your loans.

4. Use 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 — the debt avalanche and the debt snowball. The debt avalanche method is typically the best option for speedy debt repayment. Here’s how it works:

  • Rank your loans from highest interest rate to lowest.
  • If you have extra money to apply to your loans each month, apply it to the loan with the highest interest rate, while continuing to make your monthly minimum payments on all your loans.
  • Once you pay off one loan, add the amount you were paying on it to the minimum payment on your next highest-rate 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.

As for debt snowball method, it focuses on paying off 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 didn’t realize you’d have in the first place?

If you don’t like the idea of allocating all your bonus money, birthday cash or tax refunds to student loans, split it up. Assign a percentage of the extra money to your student loans, and use the rest elsewhere.

Bonus: Extreme student loan debt repayment methods

There are also more dramatic student loan repayment methods to consider. Used occasionally or in short bursts, they might help you make a lot of progress.

Decrease your expenses as much as possible

Evaluate your expenses and identify ones you’re willing to get rid of. For example, you could save a significant amount by downgrading 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 money saved to your student loans.

Apply all pay raises to your loans

When you get a pay raise, instead of using it to upgrade your lifestyle, calculate how much extra you’ll receive in your paycheck and plan to apply it toward your loans each month.

As a bonus, once your student loans are paid off, you’ll feel like you got a raise twice. That’s because you’ll get to use your pay raise for other expenses, and you’ll no longer have monthly loan payments to make.

Sell 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 use a bike? If you sell the assets and apply the money to your student loans, you can knock a ton of time off your repayment term.

But evaluate the long-term consequences — and the potential loss of wealth — to be sure this won’t cost you more money later. Examples of this could include paying more to reenter a suddenly hot real estate market or spending more on taxis than you did on car payments.

A less extreme approach could be to sell items you don’t need, such as clothes or furniture, and use that money to pay off loans. Every little bit counts.

Why you should pay off student loans early

Federal student loan interest rates are currently between 4.53 and 7.08%, depending on the type of loan, according to the Federal Student Aid office. Private student loan interest rates can vary, but they can reach 13.95%, according to FinAid.

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

Choose the payoff methods that match your lifestyle and that you’re sure you can follow through on, and you’ll be more likely to succeed.

Jacqueline DeMarco contributed to this report.

Interested in refinancing student loans?

Here are the top 6 lenders of 2021!
LenderVariable APREligible Degrees 
1.89% – 5.99%1Undergrad
& Graduate

Visit Splash

1.99% – 5.64%2Undergrad
& Graduate

Visit Earnest

1.91% – 5.25%3Undergrad
& Graduate

Visit Lendkey

2.25% – 6.88%4Undergrad
& Graduate

Visit SoFi

1.89% – 5.90%5Undergrad
& Graduate

Visit Laurel Road

2.39% – 6.01%Undergrad
& Graduate

Visit Elfi

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of Feburary 1, 2021.

2 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 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% 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 October 26, 2020, 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 10/26/2020. 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 [email protected], or call 888-601-2801 for more information on our student loan refinance product.

© 2020 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.

3 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.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 02/17/2021 student loan refinancing rates range from 1.91% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.

4 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 2.99% APR to 7.33% APR (with AutoPay). Variable rates from 2.25% APR to 6.88% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.25% APR assumes current 1 month LIBOR rate of 0.13% plus 2.37% margin minus 0.25% ACH 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. See eligibility details. 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. The discount will not reduce the monthly payment; instead, the interest savings are applied to the principal loan balance, which may help pay the loan down faster. Enrolling in autopay is not required to receive a loan from SoFi. *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. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.  

5 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.


This information is current as of January 4, 2021. Information and rates are subject to change without notice.