how to pay off student loans early

How to Pay Off Student Loans Fast: 15 Expert Strategies That Work

As a personal finance writer, I’ve interviewed a number of “success stories” who paid off a massive amount in student loans in a short amount of time. Sure, some of them had higher-than-average incomes, but most didn’t bring home an especially large salary.

Instead, they kept their living costs crazy low so they could throw as many extra payments as possible at their debt each month. Plus, they found ways to boost their income and lower their interest rates, often through student loan refinancing, to crush their debt even faster.

Although paying off student loans ahead of schedule will probably require some lifestyle changes, these sacrifices could be worth it in the long run. After all, using one or more of these approaches could bring you years closer to a debt-free life.

How to pay off student loans fast and say goodbye to debt

Wondering how to pay off student loans fast? Try one of more of these 15 effective strategies for paying off student loans early.

1. Crunch the numbers with a student loan repayment calculator

Before anything else, take some time to understand the ins and outs of your student loans. With a student loan repayment calculator, you can see your monthly payments, remaining years, and how much you’ll pay over the life of your loans.

Plus, you can play around with the numbers to see what would happen if, say, you threw an extra $50 or $100 per month at your loans. For example, let’s say you owe $20,000 at a 5.0% rate. You’re on a 10-year plan, and your monthly payment is $212.

But if you increase that monthly payment to $283, you’ll get out of debt three years ahead of schedule and save $1,711 on interest. Seeing how much time and money you could save with extra payments could motivate you to pay more toward your loans each month.

Plus, you can come up with a realistic plan for paying off your debt and stick to it month after month. Student Loan Hero has a great student loan repayment calculator, or simply google “how to pay off student loans faster calculator” to find the right tool.

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2. Throw extra payments at your student loans each month

Unless you get loan assistance or forgiveness, the only way to pay off your student loans faster is to pay more than you need to each month. Paying extra is challenging for a few reasons

Psychologically, putting even more of your hard-earned paycheck toward student loans is tough. There are so many other fun things you could be doing with your money!

And financially, you might not have much room in your budget to pay any more toward your loans than you already are. But if you can find ways to make more and spend less (which I’ll talk more about below), you might be able to find extra cash to put toward your debt.

By the way, sometimes loan servicers can be sketchy and apply your extra payments to interest when they should be applying it to your principal balance, or vice versa. So if you’re making extra payments, keep a close eye on your account to make sure they’re being applied correctly.

And if they’re not, call your loan servicer and insist they fix the error. You have a plan for paying off student loans fast, so your loan servicer should help you get there, not stand in your way.

3. Refinance your student loans for lower rates and new terms

Student loan refinancing is a savvy strategy for saving money on interest, and it could even help you with paying off student loans early. When you refinance, you give one or more of your loans to a new lender. That lender then issues you a new, consolidated loan in their place.

If you meet requirements for credit and income (or can apply with a creditworthy cosigner), you could qualify for lower interest rates than you have now. Lower interest rates will mean you’re not spending so much on interest each month, so the same monthly payment could get you out of debt even faster.

You’ll also get the chance to choose new repayment terms. If you go with a short term, you could shave years off your repayment schedule. Of course, be careful about going too aggressive when choosing terms, or you could end up with high monthly payments you can’t afford.

And private lenders aren’t always so flexible if you run into financial hardship (some, but not all, do let you postpone payments if you lose your job or go back to school). But typically, the only way to choose new terms is to refinance for a second time.

By the way, refinancing is only a good idea if you’re willing to give up federal programs. When you refinance federal loans, you turn them private and lose access to federal forgiveness programs and income-driven plans.

If you’re relying on any federal protections, don’t turn your loans private through refinancing! But if you’ve thought through the pros and cons, refinancing could be the right choice.

To get started, shop around with a few lenders. Credible and LendKey make it easy to compare multiple offers at once from private lenders and community banks with no commitment.

For more on this, head to this guide on how to refinance student loans for a lower interest rate, step by step.

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4. Increase your income by getting promoted or switching employers

Making extra payments might sound all well and good, but how can you do that if you don’t have the money? Well, if you’re serious about paying off your student loans ASAP, it could help to brainstorm ways to boost your salary.

Maybe you could work toward a promotion into a higher-paying role at your company. Stating your intention to move up to your manager could help, as well as taking on extra projects or seeking out training that could qualify you for the role.

Or perhaps you could switch employers completely to find a job with a higher salary. In fact, workers who stay at a company for longer than two years tend to get paid 50% less than those who relocate every two or three years.

Think about it. In your current job, you might only be eligible for a 3% or 4% raise each year on the base salary you already have. But if you switch employers completely, you could start with a blank slate and make a much higher income right off the bat.

The same could be true if you’re up for a career change. If you’re feeling dissatisfied with your current career, consider what skills and experiences you would need to gain to change fields. And don’t forget to think about earning potential when choosing a career.

Even though money is only part of the equation, ideally you can find a job that’s both fulfilling and pays well. And with that higher salary, you can make extra payments on your student debt.

5. Set up a side hustle to supplement your earnings

While student loans might define our generation, so too do side hustles. Funnily enough, 44 million Americans have student loans, and 44 million Americans have launched their own side hustle.

Instead of being strangled by their student loans, many Americans are finding their entrepreneurial spirit and trying unconventional ways to make more money. A side hustle could be anything from dog-walking to starting your own blog.

Here are a few ideas for supplementing your income with a side gig.

  • Drive for Uber, Lyft, or another ride-sharing service.
  • Rent out a room, apartment, or house (or host an experience) on Airbnb.
  • Take on freelance projects you find through Fiverr, Freelancer.com, Upwork, or elsewhere.
  • Start your own online business that sells products, consulting services, or whatever your area of interest or expertise.
  • Shop for groceries through Instacart.
  • Complete random tasks and chores with TaskRabbit.

If you’re still in school, consider these online part-time jobs for college students.

6. Use a cash windfall (bonus, gift, etc.) to chip away at your balance

If you get lucky and receive a windfall of cash, you might start daydreaming about shopping sprees or trips to Paris. But (not to be a total kill-joy), consider putting this windfall toward your student loans instead.

Unless you get outside help, making extra payments is really the only way to pay your student loans back faster. So if you get a bonus from work, receive a big inheritance from a long-lost relative, or get lucky with a lottery scratch ticket, consider using some or all of that windfall to pay off a chunk of your student debt all at once.

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7. Start budgeting so you can save money each month

Along with finding ways to make more money, you might also look for ways to save money each month. Create a budget and start tracking your spending. You could use a simple spreadsheet or an expense-tracking app, such as Mint or You Need a Budget (YNAB).

By understanding where your cash is going each month, you can take more control over it. Plus, you can identify areas where you overspend and find ways to save.

For instance, you might lower your rent by moving outside the city center or getting a few roommates. Instead of splurging on restaurants, try cooking at home and meal-prepping for the week. And rather than break the bank on entertainment, look for low-cost or free activities to do with friends.

It’s also helpful to avoid the creeping effects of lifestyle inflation. If you start making more money, it’s easy to up your spending to match your new salary. But before you know it, you could find yourself in the same tricky financial situation as before.

The only way to save money is to spend less than you earn, so if you can find ways to earn more and spend less, you’ll have even more dollars to throw at your student loans.

8. Work toward a federal student loan forgiveness program

Now that you have some strategies for making extra payments on your debt, let’s consider another strategy for paying back student loans: loan forgiveness.

If you’ve got federal student loans, you could qualify for federal forgiveness programs. The main ones are,

  • Public Service Loan Forgiveness (PSLF): Get total loan forgiveness after 10 years of service in a qualifying nonprofit, government organization, or other eligible workplace.
  • Teacher Loan Forgiveness: Receive between $5,000 and $17,500 in loan forgiveness after five years of teaching in a high-need school in a qualifying subject area.
  • Federal Perkins Loan cancellation: Get your Perkins loan cancelled in exchange for a year or more of service in a qualifying profession (typically for those who work in education).
  • NURSE Corps Loan Forgiveness Program: Have up to 60% of your student loans forgiven after two years of qualifying employment as a nurse, plus an additional 25% if you work for a third year.
  • National Institutes of Health (NIH) Loan Repayment Program: Get up to $35,000 in forgiveness if you’re a health professional in a research career in a qualifying setting.
  • National Health Service Corps (NHSC) loan repayment assistance: Receive up to $50,000 if you’re a licensed healthcare provider who works for two years in an eligible workplace.
  • Indian Health Services Loan Repayment Program: Earn up to $40,000 toward your loans if you’re a doctor who works in an American Indian or Alaskan native community.
  • Students to Service Program: Receive as much as $120,000 if you’re a primary healthcare provider working at an approved site for at least three years.
  • Armed Forces loan forgiveness programs: The Army, Navy, and Air Force also offer forgiveness programs to those on active duty or veterans, as well as to medical professionals in the army.
  • Income-driven repayment plan forgiveness: If you still have a balance after 20 or 25 years on a qualifying income-driven repayment plan, you could get the rest forgiven. Of course, this route means you’re in debt for even longer — two decades or more. Also, note that any forgiven amount will be treated as taxable income.

These federal programs can be a huge help for qualifying professionals, but they unfortunately only offer forgiveness for federal student loans; private loans aren’t eligible.

Also, make sure to stay up-to-date on any policy changes around these programs. The future of PSLF, for instance, seems uncertain, and only a handful of applicants have received forgiveness from this program so far.

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9. Qualify for a student loan repayment assistance program in your state

Although federal loan forgiveness programs only assist with federal student loans, you could find a student loan repayment assistance program (LRAP) that forgives both federal and private student loans.

The Rhode Island Health Professionals Loan Repayment Program, for instance, is open to healthcare professionals in Rhode Island who work in a shortage area. And the New York State District Attorney And Indigent Legal Services Attorney Loan Forgiveness Program offers up to $20,400 for qualifying attorneys.

Most state LRAPs award professionals who work for a year or more in a shortage or high-need area. Common jobs that qualify include doctor, nurse, veterinarian, lawyer, and teacher. These aren’t the only ones though, so find out if your state offers assistance that could help you.

Some graduate schools also offer repayment assistance to alumni who borrowed student loans to earn their degree. And a few states even offer repayment assistance for those who establish residency in designated areas. If you move to a “rural opportunity zone” in Kansas, for instance, you could earn up to $15,000 in loan forgiveness over five years.

Of course, not everyone is going to move for the sake of loan assistance. But if you work remotely, you might try this out-of-the-box solution for help on your student loans!

10. Choose an employer that offers a student loan benefit

Considering so many people are feeling crushed by student loan debt, a handful of employers are doing what they can to help. Some companies now offer a student loan repayment assistance benefit, along with traditional benefits such as health insurance and a 401(k) match.

Basically, certain companies will match a percentage of your student loan payments each month to help you pay them back fast. Health insurance company Aetna, for instance, offers $2,000 each year toward its employees’ student loans up to a maximum of $10,000. Fidelity similarly will match up to $10,000 over five years in student loan payments.

If you’re looking for a new job, consider prioritizing a company that offers student loan assistance to its employees.

11. Take advantage of interest rate deductions on your debt

If you’re figuring out how to pay off a large amount of student loans, you know half the battle is simply keeping up with interest. Along with potentially refinancing for lower rates, find other ways to get deductions on your interest rate.

Most lenders, for instance, offer a 0.25% rate deduction if you set up autopay on your student loans. This just means providing your bank account information and letting your loan servicer automatically deduct payments each month. Setting up autopay is a good idea anyway, since it means you can just “set and forget” your loan payments and won’t have to worry about missing a payment.

Some lenders also offer an additional rate discount of 0.25% after a few years of on-time repayment. So making on-time payments will not only help you avoid default, but it could also eventually result in interest savings.

By the way, you can refinance more than once to get the lowest possible rate. If your credit score has improved or your income has increased since the last time you refinanced (or if interest rates have decreased across the board), refinancing for a second or third time could snag you lower rates on your loans.

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12. Make biweekly payments instead of paying once per month

Most lenders set you up on a monthly payment schedule on your student loans, but paying every two weeks could get you out of debt faster. When you make biweekly payments, you end up making an extra payment each year.

Let’s say you owe $30,000 at a 5.0% rate. On a 10-year plan, you’d pay $318 every month. Over a year, these monthly payments would total $3,816.

But if you make biweekly payments of $159, you’d make 26 payments over the year. So after one year, you’d have paid $4,134 toward your loans — $318 more than if you stayed on the monthly schedule.

This extra amount can add up over time, save you money on interest, and get you out of debt faster. It’s especially effective if you can make extra payments along the way.

13. Avoid long repayment terms for the sake of lowering your bills

When you’ve got student loan bills, it’s tempting to pay less each month. For instance, you could put your federal loans on an income-driven plan or extended repayment to lower your bills and extend your terms to 20 or 25 years.

And if you refinance student loans, you have the option to choose repayment terms of 15 or 20 years, which means you’ll have lower monthly payments. This strategy can be useful if you’re not making a high salary and need lower payments to avoid default.

But it will also leave you in debt for a lot longer and cost more interest over the long run. So if your goal is to speed up student loan repayment, avoid the temptation of extending your terms unless you really need to.

14. Work for a foreign employer in another country for 20+ years

How do you feel about living the expat life? If you’re open to leaving the country for a large chunk of your life, you could get rid of your student loans completely.

Here’s how it works. Income-driven plans offer loan forgiveness after 20 or 25 years of income-driven repayment.

They also adjust your monthly payments based on your income. But if you’re working for a foreign employer, your U.S. income will basically be zero.

And any percent of zero is zero, so your monthly bills on an income-driven repayment plan could be reduced to nothing. After 20 or 25 years, you could get the whole balance forgiven without having paid a cent up until that point.

Of course, there are a few dangers to this approach. One is that you’ll still have to pay a tax bill on the forgiven amount. If your balance has been growing for two decades or more, this could be a hefty tax bill.

The second is that $0 payments means interest will keep accruing. If you decide to return to the U.S., you could be facing a much bigger balance than when you started. And third, the Department of Education sometimes changes its policies depending on who is in office. If a future administration decides to do away with these forgiveness programs, you could be out of luck.

At the moment, though, this strategy could be a savvy way to explore the world, live and work abroad, and forget about your student loans for a while. For more on this unconventional strategy, check out this full guide.

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15. Stay focused on your end goal of a debt-free life

If you’re struggling with a large amount of debt, it’s easy to feel discouraged, especially when you see other people posting photos of luxurious vacations and new houses on the ‘gram.

But remember that tons of people are dealing with student loans, even if they don’t talk about it much. And everyone’s financial journey is their own, so avoid the temptation to “compare and despair.”

Instead, come up with a plan for conquering your debt, and focus on your end goal of financial independence. You might encounter setbacks along the way, and there could come a time when you need to adjust your approach.

But now that you know how to pay off student loans fast, keep plugging away and celebrating your successes. In the end, all your hard work will pay off and you can get rid of your burdensome student loans once and for all.

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