7 Student Loan Repayment Strategies from Experienced Borrowers

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Checking your rates won’t affect your score.

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When it comes to repaying student loans, everyone’s approach will look a little different.

One borrower might choose an income-driven repayment plan to cap their monthly bills. Another might postpone their payments through deferment, while a third makes extra payments each month to get out of debt faster.

To find out more about the various approaches to paying off loans, I spoke with four different borrowers about their experiences. Here are the strategies they used to manage their student loans without falling behind or going broke.

1. Throwing extra payments at student loans

When Michael Outar graduated from college, he owed $24,000 in student loans. But instead of sticking to the standard 10-year plan, Outar paid off this debt in just two years by making extra payments each month.

How did Outar find room in his budget?

“A neat trick I used to pay off my debt quickly is to cut my spending and pretend like I am spending the same amount of money — but I am actually using the money I saved to pay off my student loans,” said Outar.

Outar cut his spending considerably and put his extra money toward his loans. Now a personal finance blogger at Savebly.com, Outar advises other student loan borrowers to take the same approach.

“Find ways to cut costs or ways to increase your income, and use that money to pay off your student loan debt,” advised Outar. “Throw whatever extra money you have at your student loan debt!”

By making extra payments, you could save money on interest and get out of debt years ahead of schedule.

2. Deferring payments while job searching

While extra payments can save you money on interest and get you out of debt faster, not everyone has room in their budget for this approach. In fact, you might be struggling just to make the regular payment each month.

In this case, postponing payments through deferment or forbearance might be a better strategy. That’s what Jason Butler, owner of My Money Chronicles, chose to do for a couple of years after graduating with $38,000 in student loans.

“It took me a year and a half to find a full-time job after I graduated from college,” said Butler. “I couldn’t pay the loans, so I had to defer them.”

While pausing payments can help, it might also come with some downsides. Unless you have subsidized loans, your debt will continue to accrue interest during this time. Once you resume repayment, you’ll be facing an even bigger balance.

Butler’s loans, for example, grew to nearly $62,000. Still, though, Butler says deferment was the right choice at the time.

“It was helpful, because if I didn’t defer the loans, I probably would have defaulted on them,” he said.

Deferment and forbearance can be useful options, but make sure you understand the downsides of postponing student loan payments, too.

3. Refinancing at a lower interest rate

Once he found a steady job, Butler decided to be proactive about getting his loans out of repayment and paying them off more aggressively.

“I got focused on … paying [off] the debt,” said Butler. After reading about how refinancing can lower your interest rate, Butler decided to refinance his private student loans.

He shopped around with refinancing providers, finally landing on an offer from Earnest. Butler’s new loan had a starting variable interest rate of 5.6% and a repayment term of 20 years, though he plans to pay it off ahead of schedule.

That last point is important, since although a longer loan term translates into a smaller monthly payment, it will also keep you in debt longer, meaning you’ll pay more interest over the life of the loan.

Note too that Butler refinanced private student loans rather than federal ones. While it’s sometimes also worth refinancing federal debt, swapping federal loans for a private refinancing loan means you’ll lose access to income-driven repayment plans and some government loan-forgiveness programs.

4. Applying for Income-Based Repayment

On the standard 10-year repayment plan, finance professor Brandon Renfro was paying $1,000 per month toward his student loans. To reduce this hefty bill, he decided to apply for Income-Based Repayment (IBR).

“I chose to use an income-driven repayment plan so that I could lower my payments,” said Renfro. “IBR lowered [my monthly payments] to $700. That’s a 30% reduction, which certainly isn’t trivial.”

Income-driven plans such as IBR base your monthly bills on how much you make. Depending on when you borrowed, an income-driven plan could cap your payments at 10%, 15%, or 20% of your discretionary income. What’s more, if you still have a balance after 20 or 25 years of on-time repayment, the remainder can be forgiven.

Reducing his monthly bills through IBR not only helped Renfro become a homeowner, but it also allowed him to work as a professor at a private not-for-profit college.

“Although I knew I wanted to be a professor, the existence of student loan programs like IBR … made it much easier, said Renfro. “The general idea behind these types of programs is that it makes jobs that are relatively less-compensated more feasible. I can safely say I’d be in an industry position if it weren’t for [IBR].”

5. Seeking Public Service Loan Forgiveness

Reducing monthly payments wasn’t the only reason Renfro put his loans on IBR. He’s also hoping to get his loan balance wiped out earlier through Public Service Loan Forgiveness (PSLF).

“The Public Service Loan Forgiveness allows borrowers to have any remaining portion of their student loans forgiven after making 120 qualifying payments,” said Renfro. “IBR payments are qualifying.”

Other income-driven plans will also make you eligible for PSLF, which forgives your loans after just 10 years if you work in a qualifying organization.

“Any governmental job or employment at a not-for-profit 501(c)(3) employer qualifies,” explained Renfro. “I am a finance professor at a private, not-for-profit school, so my employment qualifies.”

While PSLF is a great option for public service employees, it’s important to note that the program has become a hot-button topic as of late. Several Republican lawmakers proposed eliminating PSLF with the PROSPER Act, and many borrowers have seen their applications denied on technicalities. Although the program is still running, there’s no guarantee that it won’t disappear in the future.

6. Setting up a side hustle for extra income

After Making Momentum founder Scott Wesley earned his degree, he felt overwhelmed by his student debt burden of $38,000.

“I was entering adulthood and wanted to push forward with my life. This debt felt like a weight around my ankles that I needed to shed ASAP,” Wesley said.

He jumped into action, refinancing his student loans to a lower rate and increasing his monthly payments to get out of debt more quickly. Knowing that cutting his spending could only help so much, Wesley made it his mission to increase his income as well.

“I set a goal of making $1,000 fast in order to test the side-hustling waters and understand what options to make money outside my 9-to-5 were available,” said Wesley. “Freelancing the skills I had through Upwork by waking up at 5 a.m. every day started earning me an additional $1,200 each month.”

In addition to freelancing, Wesley made extra cash through selling his stuff.

“Similar to most people, I had a ton of stuff in my closet,” said Wesley. “I did another audit and sold excess clutter that wasn’t bringing value to my life. This total of $2,500 in electronics, clothes and sporting goods was also immediately put against the principal.”

By setting up additional streams of income, Wesley was able to speed up his student loan repayment timeline from seven years to just three.

7. Avoiding the temptation of lifestyle inflation

For Wesley, increasing his income was no easy feat. Along with finding the willpower to wake up early and hustle, he also had to avoid the temptation to increase his spending.

“As my career income increased, bonuses at work came in, and side hustle streams grew, I didn’t let lifestyle inflation creep in or ‘FOMO’ [fear of missing out] shift the goal I had set,” he said.

Because he was so focused on paying off his debt, Wesley made sure he kept his spending low, even when he had more money coming in.

“I made paying off this debt my top financial priority, as I wanted to rid myself of the stress and lack of freedom it created,” he said.

At the same time, he recognizes that each person’s situation is different, and his approach might not be for everyone.

“Personal finances are of course personal. What worked for me may not be entirely applicable to your situation,” said Wesley. “However, the strategies above are evergreen, and I believe can help those struggling with student loan debt shift their mindset and ideally conquer that ‘balance owed’ sooner.”

If you can find ways to increase your income and cut your spending, you can get out from under the shadow of debt faster than you might realize.

Explore your options for student loan repayment

When it comes to dealing with student loans, there’s no one-size-fits-all solution. Everyone’s situation is different, and what works for one borrower might not work for another.

If you’re struggling to pay your bills, for instance, an income-driven plan, forbearance or deferment could offer relief and help you avoid default.

But if you can find ways to cut your spending or make extra money, then applying some extra payments to your loan could lead you to a debt-free life more quickly.

Inform yourself about your options for repayment so you can choose the best one for your situation.

Interested in refinancing student loans?

Here are the top 9 lenders of 2021!
LenderVariable APREligible Degrees 
1.88% – 6.15%1Undergrad
& Graduate

Visit Splash

1.88% – 5.64%2Undergrad
& Graduate

Visit Earnest

2.50% – 6.85%3Undergrad
& Graduate

Visit CommonBond

1.89% – 5.90%4Undergrad
& Graduate

Visit Laurel Road

2.25% – 6.39%5Undergrad
& Graduate

Visit SoFi

1.88% – 5.64%6Undergrad
& Graduate

Visit NaviRefi

1.90% – 5.25%7Undergrad
& Graduate

Visit Lendkey

2.39% – 6.01%Undergrad
& Graduate

Visit Elfi

2.13% – 5.25%8Undergrad
& Graduate

Visit PenFed

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 June 1, 2021.

2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Interest Rate Disclosure

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.59% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance 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 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.

Auto Pay Discount Disclosure

You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.

Student Loan Refinancing Loan Cost Examples

These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.

Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.

One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.

© 2021 Earnest LLC. All rights reserved.

3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. ‍All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.

4 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 www.laurelroad.com.

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 April 29, 2021. Information and rates are subject to change without notice.

5 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates from 2.74% APR to 6.74% APR (with autopay). Variable rates from 2.25% APR to 6.39% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

6 Important Disclosures for Navient.

Navient Disclosures

1. NaviRefi loans are made by Earnest Operations LLC, a member of the Navient family of companies, subject to individual approval and underwriting criteria. California residents only: Loans made or arranged pursuant to a California Finance Lenders Law license. Additional terms and conditions apply.

– To qualify, you must be a U.S. citizen or non-citizen permanent resident of the United States, reside in a state we lend in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.navirefi.com/help-and-questions. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Loan terms are subject to eligibility. Approval and interest rate depend on the review of a complete application. Loan approval is subject to confirmation that your debt-to-income, free cash flow, credit history and application information meet the minimum requirements. You must have a minimum FICO score to be considered.

– You can choose between fixed and variable rates. Fixed interest rates are 2.75% – 6.04% APR (2.50% – 5.79% APR with Auto Pay discount). Starting variable interest rates are 2.13% – 5.89% APR (1.88% – 5.64% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

– You can take advantage of the 0.25% Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. NaviRefi rate ranges are current as of June 1, 2021 and are subject to change based on market conditions and borrower eligibility.

– The information provided on this page is updated as of 06/1/2021. Earnest Operations LLC reserves the right to modify or discontinue (in whole or in part) this loan program and its associated services and benefits at any time without notice. Check www.navirefi.com for the most up-to-date information. Terms and Conditions apply. Call 855-284-4893 for more information on our student loan refinance product.

– Earnest Operations LLC – NMLS #1204917, CA CFL #6054788 – 535 Mission St., Suite 1663, San Francisco, CA 94105.
Navient Solutions, LLC – NMLS #212430 – 123 Justison St., Wilmington, DE 19801. Visit https://navirefi.com/lending-licenses for a full list of licensed states.

7 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.

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 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.

8 Important Disclosures for PenFed.

PenFed Disclosures

Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are 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.