10 Tips on How to Pay Off Student Loans Quickly

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Do you owe a piece of America’s more than $1.48 trillion in student loan debt? If so, there’s a good chance you’re trying to figure out how to get rid of that debt.

When you have student loan debt, you’re painfully aware of the stress it can add to your life — not to mention the fact that you might be delaying major life decisions because of the debt. But if you owe a lot, you may feel at a loss as to how to pay off the student loans casting a shadow over your life.

A system can help you tackle your debt and stay motivated. “Your money, when you complete your plan, will have so much more power,” popular financial expert Dave Ramsey told Student Loan Hero. “Above all, believe you can do this.”

If you take a step back and employ the following strategies from Ramsey and other money experts, you might be surprised at the progress you make as you work to crush your student loan debt:

1. Get on a monthly budget

The first step to figuring out how to pay student loans, according to Ramsey, is to create a budget and stick to it.

“A monthly budget will show you exactly where your money is going and where you can cut back,” Ramsey said. “A lot of people find extra money they never knew they had. Throw that money at your student loans each month.”

Amber Masters and her husband are paying off a combined $649,000 in student loan debt they owe as a result of becoming a lawyer and a dentist. A budget has been a great help to them as they prioritize student loan repayment.

“We live off a set budget, and any income above that budget goes straight into our student loans,” said Masters. “We can pay them off as early as possible and save money on the interest that is accruing on them.”

2. Refinance your student loans

One way to reduce your payments and manage your cash flow on a monthly budget is to refinance your student loans, said Carla Dearing, the founder of Sum180, an online financial wellness services.

When you refinance your student loans, you’ll have one consolidated loan with a single monthly payment and a potentially lower interest rate,” said Dearing. “This is important because more of each payment goes toward paying down the balance owed.”

Watch out, though: Refinancing is only available through private companies. If you refinance federal loans, you could end up losing some of their protections.

Tim Hewitt, a certified financial planner and senior wealth advisor at Wiley Group, suggested looking into consolidation for federal loans. “It will combine multiple monthly payments into a single payment,” he said. “It can make the overall loan burden easier to manage.”

But he warned that federal loan consolidation might also mean a longer term, costing you more in interest payments. This is one of the trade-offs when you decide how to pay off student loans, but Hewitt suggests getting around the longer term by making extra payments to retire the debt early.

3. Get a job that offers loan forgiveness

You might be surprised to find out that there are jobs that can result in forgiveness for your remaining student loan balance. Hewitt pointed to programs like Public Service Loan Forgiveness that focus on work in government, education, and the nonprofit sector.

Not only are there federal loan forgiveness programs, but there are also state-based programs for teachers, healthcare professionals, and others. You might also find loan repayment assistance programs in states looking to attract dedicated workers.

As long as you meet the requirements of the program, you could be eligible. Realize, though, that in some cases a forgiveness program is most effective in conjunction with income-driven repayment, which lowers your monthly payments to a manageable portion of your income. If you become ineligible for forgiveness by switching to a non-qualifying job, you could be in a worse position in the long run.

Carefully consider these programs, and make sure you are prepared to commit to the work requirements before you apply.

4. Use a debt repayment strategy that works for you

Ramsey is famous for popularizing the “debt snowball” method of repayment.

“List all your debts, smallest to largest, regardless of interest rates,” Ramsey said. “Make minimum payments on everything to keep them current, and attack the smallest debt with a vengeance.”

This method works because you get a quick win that gives you a psychological boost to continue with your debt repayment.

However, the “debt avalanche,” a strategy championed by Harlan Landes, one of the earliest online personal finance experts, might be worth considering as you decide how to pay off student loans. With this method, you rank your student loan debt by interest rate and tackle the highest-rate loan first.

“Mathematically, starting with a higher-rate loan will be more effective in reducing what you pay in interest and helping you get out of debt faster,” said Landes. “But it can be hard to stick with for some people because it takes a little longer to achieve that first win.”

The important thing, Landes said, is to figure out which approach will help you stay motivated to press forward. In the end, your strategy should be something you can stick with for the long haul.

5. Consider living with your parents (or a roommate)

Single? Maybe you can move back home with mom and dad.

“Live at home until you get a suitably-paying job in your degree area,” said Richard M. Gutkowski, Ph.D., and author of the “DEBT is a Four-Letter Word, But it Need Not Be!” series of books. “While you look for a job in your degree area, find any other job that provides an income so you can pay down your loans.”

In many cases, Gutkowski said, parents are willing to help you save money on living expenses so you can tackle your student loan debt.

But what if it doesn’t make sense to move in with your parents? Perhaps they don’t live near your job, or it’s just not an option. Jordan Russell, an account manager with Canadian lender Loan Away, suggested getting a roommate if you can.

“For many, the largest expense is renting or a mortgage, so you shouldn’t be living alone,” Russell said. “If you have friends, live together.” Sharing housing expenses can free up money to put toward student loans.

6. Live a frugal lifestyle

Whether or not you live with someone else to cut costs, Russell said, it makes sense to take various steps to reduce your financial outlay. “Living a very humble lifestyle will go a long way,” he said. “Try to spend no more than 40 percent of your net pay on living expenses.”

Russell proposed the following ways to cut back on living costs:

  • Cook your own food and eat out as little as possible.
  • Try to make your current gadgets and electronics last as long as possible.
  • Avoid buying expensive clothing, and instead shop at consignment and thrift stores.
  • Rather than buy a car, take public transit or ride a bike. Not only will you save on car loan costs, but you will avoid maintenance and repair expenses, and you won’t have to pay auto insurance premiums.
  • Spend time with like-minded people who won’t tempt you into spending money.

With a little planning, said Russell, it’s possible to save money each month and use those savings to reduce what you owe on student debt.

7. Earn more money with a side gig

It’s not just about cutting back, said Masters. In fact, there’s only so much you can chop from a budget. Once you can’t reduce your expenses any further, it’s time to make more money.

“We earn more by asking for raises at work or running various side hustles,” said Masters. “Any form of extra income coming in helps us pay off our student loan debt even faster.”

Side gigs like driving for a rideshare company, pet-sitting, and even being a professional snuggler (providing platonic physical contact and emotional support) can help you earn an extra $500 a month that can be put toward paying down your student loans.

Kelli Bhattacharjee, the founder of Freebie Finding Mom, paid off $15,000 in student loans by creating a plan that involved earning extra money. “Get a part-time job on the evening or on weekends,” she said. “Mark those earnings to use only for paying off student loans.”

8. Use a windfall

Anytime you get extra money, whether it’s a tax return, an inheritance, or a work bonus, use it to pay down a chunk of your student loans.

“We like to think of a windfall as fun money, extra money to play with,” said Landes. “But really, it can be used take a big bite out of your principal.”

He recommended using at least 75 percent of any windfall you receive to put toward debt. “Make an extra payment to your student loan servicer, making sure to specify that you want it to go to the principal. You’ll reduce your balance and get that much closer to being free of the debt.”

9. Make it automatic

One of the best ways to get in front of your debt payments is to automate them. Bhattacharjee said that automatic payments could help keep you from the temptation to spend.

Not only that, but there are some loan servicers that will give you a slight reduction (often about 0.25%) in your interest rate if you set up autopay. That can save you over time, especially if the servicer combines automatic payments with another reduction after a set number of on-time payments (usually an additional 0.25% off your rate after 24 or 36 timely payments). Find out from your servicer if you can get these rate discounts.

10. Ask your employer to help

A growing number of companies offer student loan benefits to their workers. Some employers, like Student Loan Hero, will match your student loan payments each year up to a certain amount. With this extra boost, you can speed up the process.

Gutkowski suggested that you check with your human resources department about student loan benefits and whether they are tied to how long you agree to work for the company.

How to pay off student loans: Use multiple strategies

For best results, you might need to combine techniques. The more options you have for putting money toward paying off student loans, the faster you’ll reduce your debt. For more great ideas on how to pay off student loans, check out The Ultimate Guide to Paying Off Student Loans Faster.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderVariable APREligible Degrees 
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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: https://www.earnest.com/eligibility. 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 https://www.earnest.com/terms-of-service, email us at hello@earnest.com, 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

Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.

Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, 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.

Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance:Fixed rates from 3.899% APR to 7.804% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% 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 2.470% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.64% 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. 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. (www.nmlsconsumeraccess.org)

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com 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 LendKey.com. 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 LendKey.com 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 October 1, 2018, the one-month LIBOR rate is 2.22%. Variable interest rates range from 2.72%-8.32% (2.72%-8.32% 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 http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, 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. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. 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 cosigner who is a U.S. citizen or permanent resident. The cosigner (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 cosigner 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.

2.47% – 6.99%3Undergrad
& Graduate
Visit SoFi
2.47% – 5.87%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.95% – 6.37%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.72% – 8.32%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.