Your Guide to Paying Off Student Loans Faster

How Student Loan Hero Gets Paid

How Student Loan Hero Gets Paid

Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

Logo

OUR PROMISE TO YOU: Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less


Student loans can eat up a big portion of your paycheck before it even has the chance to hit your bank account. If you want your debt to go away ASAP, you’re going to have to upgrade your student loan repayment strategy. And this starts with learning how to pay off student loans fast.

Fortunately, you have lots of great options for paying off student loans faster, including:

How to pay off student loans fast

To learn more about these options for student loan repayment, and to get a few bonus tips, here’s our guide to paying off student loans fast with strategies that could work for just about anyone.

1. Make more than the minimum payment

Effectiveness level: Medium-High

This is one of the easiest ways to reduce your debt. Just take the payments you have and add extra money to the payment. You should already have payments set up, so anything extra goes straight toward your principal.

One easy way to do this: Set up automatic payments with this extra amount added in. This takes any indecision out of the equation and makes it harder for you to change your mind, too.

Even if you can only afford an extra $20 a month, it’s something. Start there, then gradually work on increasing your extra payments.

2. Do the math and find your payoff date

Effectiveness level: Low

Do you know exactly when you’ll be free of student loan debt? If you answered no, you’re not alone.

But figuring out your payoff date is always a good place to start when it comes to managing debt. Why? Because once you know this date, you can work on moving it closer.

The easiest way to figure this out: Use the National Student Loan Data System to view all of your federal loans and AnnualCreditReport.com to make a list of private loan lenders. Then, confirm payoff dates with your loan servicers.

3. Consolidate and refinance

Effectiveness level: High

Refinancing your loans is one of the best moves out there for paying off student loans faster. The goal of refinancing is to decrease interest rates, meaning more of your payments go toward paying down your student loans.

When you refinance multiple student loans, you’ll get one consolidated loan with one monthly payment. Alternatively, you could refinance just one student loan for lower rates. You’ll likely only want to refinance loans where you can actually decrease your interest rate.

For example, student loan refinancing rates below 3.00% are currently available. For current rates, see our post on student loan refinancing rates.

4. Use a cash windfall

Effectiveness level: Medium

Cash windfalls come in various forms. These can include lottery winnings, an inheritance, a settlement from a lawsuit or insurance claim and more.

When you suddenly get a chunk of money from these sources or others, you might be tempted to spend it. It’s so tempting that Bankrate reports an increase in lottery winners’ likelihood to declare bankruptcy within three to five years of receiving the cash windfall.

So instead of spending it on stuff you won’t even remember, use it for paying off student loans faster.

Even if you don’t get an inheritance or something similar, many taxpayers get a cash windfall once a year in the form of a tax refund.

There are several tax refund strategies for student loan debt that work for any sort of financial windfall. The main takeaway: Put at least some of your tax refund (and/or cash windfalls) toward student loan repayment, even if you don’t want to devote 100%.

5. Take a job that offers forgiveness

Effectiveness level: Medium-High

Certain jobs, like public service work or teaching, may offer forgiveness for part or all of your student loans. All you have to do is meet the requirements to get your student loans forgiven. See our guides to Public Service Loan Forgiveness and teacher student loan forgiveness for more details.

There is one potential downside: You need to meet all the requirements and complete the full term of work required to get any forgiveness.

Since these forgiveness programs are typically used in conjunction with income-driven repayment plans, your payments will decrease but interest charges will accumulate. If you wind up ineligible for forgiveness for any reason, you’ll be stuck with greater interest charges.

In addition to these federal student loan forgiveness programs, some states also offer loan repayment assistance programs (LRAPs). These LRAPs also usually come with a work requirement. If you qualify, you could get money toward paying off your federal (or in some cases, private) student loans.

6. Apply your raises

Effectiveness level: High

Hopefully, you work at a job where yearly raises are part of the compensation. But what do you actually do when you get a raise? You could just get more stuff — a bigger TV, a better car or more exotic vacations. But why not put a chunk of it toward student loan repayment?

We covered this in our post about how to start investing, but the same strategy could be used with student loans. Just put half of your raise amount straight toward student loan payments. This means either upping your automatic student loan payments or transferring the money to a savings account.

7. Avoid repayment programs

Effectiveness level: Varies

You might be focused on lowering your student loan payments; this makes a lot of sense if you’re struggling to repay your student loans. But if your goal is paying off student loans faster, you probably want to avoid income-driven loan repayment programs.

Why would you want to do this? Well, almost all of these federal student loan repayment programs are geared toward decreasing payments by lengthening the term of the loan. This means it’ll take longer to pay off student loans.

For example, Pay As You Earn (PAYE) stretches your federal student loan repayment term from 10 years to 20 years. We don’t have to tell you that’s a much slower repayment period.

Even direct loan consolidation can prevent faster student loan repayment. Why? Because you’re blending all your student loans, which have different interest rates, into one loan. This means you can’t target the high-interest loans with extra payments after you consolidate. For more detail on this, see student loan myth No. 4.

8. Trim your budget

Effectiveness level: Medium-High

If you want to find more money but can’t easily increase your income, decreasing your budget is an option. While it may sound extreme, some have trimmed their budgets drastically by moving to a cheaper apartment, skipping happy hours or meals out, earning more side income and other strategies.

The key to success: You only have to do this in the short term. It’s not for the rest of your life, but rather a short period where you’re focused on paying off student loans faster. A few common strategies are:

  • Cancel cable TV
  • Don’t go out to restaurants
  • Give up alcohol

The options here are really only limited to your creativity and motivation.

Even if you can only handle it for a month at a time, it can still benefit your student loan repayment. Maybe you have a “no-spend month” where you don’t buy any new stuff all month and put the money toward student loans instead.

9. Earn extra money with a side gig

Effectiveness level: Medium

Along with trimming your budget, you could try supplementing your income with a side gig.

Side gigs come in all shapes and sizes. You could offer a service online, such as tutoring, editing or design. Maybe you could finally clean out your closets and sell your used clothes. Or, as this TV producer did, you could start your own cookie-baking business.

Whatever form your side gig takes, you can use it to earn extra money. Then, take those extra earnings and apply them directly to your student loan balance. Not only will your extra income help you pay off student loans faster, but you also might learn some new skills (and have fun) in the process.

10. Be strategic about your debt

Effectiveness level: Medium

The first step to repaying your loans faster is to add more money to your student loan payment. But how you apply that extra money could make a big difference, too.

For all student loans, it makes the most sense to pay off the highest interest loans first. This is called the “debt avalanche” method, where you pay just the minimum on all but the student loan with the highest rate.

You might be best off targeting private student loans first, too, before focusing on federal student loan repayment. Repaying private student loans often means higher interest rates and less-flexible repayment terms compared to federal student loans. Private loans can have variable interest rates as well, meaning your rate could rise over time.

By targeting the loans with the highest interest rates first, you’ll save the most money on interest.

An alternative approach is called the “snowball method.” This involves paying off your loans with the lowest balances first. Although you won’t save as much on interest, you might get a psychological boost from closing out an account.

Choose whichever method will motivate you to keep working toward your goal of paying off student loans faster.

11. Take interest rate reductions

Effectiveness level: Low

While you can cut down on the cost of your student loans and get some big wins with the strategies above, smaller savings can add up, too. One of them is the interest deduction from signing up for automatic payments.

Many servicers offer a 0.25% interest rate deduction on federal student loans for enrolling in automatic payments. While this isn’t a ton of money, it’s not bad to get a few bucks back.

Besides the interest savings, automatic payments can be a good idea to make life easier. By setting up automatic payments, you don’t have to worry about late or missed payments when paying back student loans (which matters for your credit score). Plus, you can use automatic payments in conjunction with other strategies on this list, like making payments higher than the minimum.

12. Take full advantage of tax deductions and credits

Effectiveness level: Medium

If you’re paying off student loans, you’re likely eligible for the student loan interest deduction on your federal taxes. You may deduct up to $2,500 on your taxes each year for the interest you pay on student loans.

While you must meet other requirements, generally a lot of student loan holders in their 20s will be eligible. That’s because this deduction can be taken even if you don’t itemize your taxes (which many young taxpayers don’t do).

Tax credits can be even more valuable than tax deductions. In general, a $2,500 tax credit will save you more money than a $2,500 deduction will.

You might be eligible for tax credits if you’re currently paying tuition, including while you’re in grad school. While there aren’t any tax credits related to simply paying student loans, it’s worth checking out if you’re currently in college or thinking about going back to school soon. See our post on student loan tax credits for more information.

13. Realize student loans aren’t “good debt” to keep around

Effectiveness level: Low

You might hear chatter about “good debt” and “bad debt.” And while student loans are generally a good investment based on increased income potential in your lifetime, along with some deductions, it’s not good debt to keep around.

The good-debt-versus-bad-debt debate is really about how that debt helps you increase the value in something. In this case, it’s the value of a salary.

But while taking out student loans is a good idea, letting them sit around forever isn’t. Interest charges stack up the longer you wait to repay loans.

Of course, you can be strategic when figuring out how to pay student loans, but merely calling student loans “good debt” as an excuse to drag out repayment isn’t a good idea.

14. Pay every two weeks

Effectiveness level: Medium

Another popular extra-payment strategy for student loans is to make a student loan payment every two weeks.

Now, you don’t need to pay double the amount of your monthly payment to make this work. Instead, here’s the common strategy:

  • Split your monthly payment in half.
  • Make a payment of that amount every two weeks.

By doing this, you’ll make a full extra payment over the year. The real strength of this strategy is that if you receive a paycheck bi-weekly, you shouldn’t feel the pain of paying the extra amount.

15. Visualize the future without student loans

Effectiveness level: Low

While this isn’t exactly a repayment strategy, it can help you find motivation to get rid of your debt, especially if it’s causing a lot of stress in your life.

Here’s an easy way to start your visualization. Think of the one thing you hate most about having student loans. Maybe it’s that you can’t afford to go on a vacation, or maybe you have to eat rice and beans to scrape together enough money to pay your bills. Perhaps you drive a crappy car that breaks down all the time.

Now close your eyes and imagine what your life would be like if that No. 1 most hated thing were no longer a problem because you don’t have student loans. How would your life change for the better? Would you be happier? What would you do without having to worry about student loans?

Is this a life you want to have? With enough hard work, getting rid of your student debt can become reality. Now go get it!

Rebecca Safier and Christy Rakoczy contributed to this article.

Interested in refinancing student loans?

Here are the top 6 lenders of 2020!
LenderVariable APREligible Degrees 
1.89% – 6.66%1Undergrad
& Graduate

Visit Splash

1.89% – 5.90%2Undergrad
& Graduate

Visit Laurel Road

2.25% – 6.09%3Undergrad
& Graduate

Visit SoFi

1.99% – 5.34%4Undergrad
& Graduate

Visit Earnest

1.97% – 8.54%5Undergrad
& Graduate

Visit Lendkey

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 October 1, 2020.


2 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%.

KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

This information is current as of December 1, 2020. Information and rates are subject to change without notice.
 


3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 2.99% APR to 6.09% APR (with AutoPay). Variable rates from 2.25% APR to 6.09% 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 0.18% plus 2.32% 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. *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. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. 

4 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 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 https://www.earnest.com/terms-of-service, 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.


5 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 11/13/2020 student loan refinancing rates range from 1.97% to 8.54% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.