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7 Ways to Pay Off Your Student Loans Fast

So, you’ve determined you’re in a financial position to repay your student loans early  and are now ready to make a game plan for paying off your student loans faster. First off, congratulations on getting to this point! It’s an exciting step to take in your journey towards financial freedom.


We’ve got 7 ways to help you achieve your goal:


  1. Refinance your loan (if it makes sense) 🏦
  2. Enroll in autopay 💵
  3. Pay more than your minimum payment ⬆️
  4. Don’t necessarily bank on loan forgiveness, be aggressive with your payments 🚫
  5. Use your tax refund to pay down your loan ⬇️
  6. Check your employee benefits 💥
  7. Pick up a side hustle 💰


1. Refinance your loan (if it makes sense)


What does it mean to refinance a loan? Refinancing a loan is when you take out a new loan to pay off one or more existing loans. When talking about student loans, it’s the process of finding a new lender to consolidate your federal and/or private student loans so you can ideally get a better loan rate or better payment terms than what you currently have.


Take your time when researching which lender is best for you. When researching which lender to refinance with, you’ll find there are a lot of options. Some student loan refinancing lenders include Earnest, Education Loan Finance, Discover, SoFi, and Splash Financial. To see which lender is best for you, consider making a list with the following column headers:


  • Loan provider name
  • Qualification requirements
  • Interest rate
  • Loan Term
  • Monthly payment
  • Additional benefits


If you discover that you would not get a better interest rate or payment terms than what you already have if you refinance, you may want to reconsider. You want to avoid getting deeper into debt.


Refinancing often makes the most sense for those who have a good credit score, have a steady job, and have student loans with multiple lenders. You can learn more about the ins and outs of refinancing your student loan debt by reading our blog about How To Lower the Interest Rates on Your Student Loans.


2. Enroll in autopay


Set it and forget it. If you’re in a financial position to set autopay for your student loan payments, do it! This will not only help you avoid late fees, but depending on your lender, you might be able to lower the interest rate on your loans or receive other perks by selecting the auto-pay option.


After enrolling in autopay, some lenders will lower the interest rate on your loan by 0.25%. While it may seem minor, this discount can make a large difference over time. Remember, every penny counts when you’re paying off your student loans.


3. Pay more than the minimum payment


The quickest way to pay off your student loan is to make additional payments to the principal of the loan. The smaller the principal amount of your loan, the smaller the amount of interest that will accrue, meaning you can repay faster.


If you’re planning to pay more than the minimum payment on your loan, it’s crucial that you take the time to see how your student loan servicer will apply the additional payment. Often student loan servicers will view an additional payment as a “paid ahead” amount for future payments. When this happens, you do not save on any interest. As uncool as that sounds, it’s often the unfortunate truth.


For example, if your student loan payment is $298 per month and you make an additional payment of $100 that your lender deems to be “paid ahead,” your next monthly payment will be $198.


To change this, contact your student loan servicer to make sure your additional payment is applied to the principal of the loan. After receiving confirmation that they will apply your additional payment in this way, be sure to carefully examine your student loan statements. Do this to ensure your student loan servicer is actually following your request. This may sound over the top and time-consuming but has the potential to save you money and reduce headaches down the road.


4. Don’t necessarily bank on loan forgiveness


Is the U.S. in a student loan crisis? Yes. When you were a student, were you told that it’s not a big deal because the loans will be forgiven later?


When reviewing your student loans and deciding what next steps to take, don’t bank on getting your loans forgiven. Graduates who work within the public sector in government organizations, non-profits, law enforcement, teaching, or the military may qualify to have their student loans forgiven. There are extensive eligibility requirements you must meet in order to have your loans forgiven, and even then, there are no guarantees.


Often you will be required to make payments on your student loans over a set amount of time, verify you have worked within the public service sector for a specific number of years (and/or are currently still working in that field), and there may be more specific requirements depending on your career.


So, unless you’re in a public service career and meet 100% of the eligibility requirements for your career field, try to pay off your student loans as quickly as possible. If you can afford to, you should consider paying more than your monthly payment and apply it to principal. 


5. Use your tax refund to pay down your loan


If you can’t afford to regularly apply more to your monthly student loan payments, you might discover that there are a few times during the year where you can. A great example of this is during tax season. If you receive a tax refund, a smart way to use that money could be to pay down the principal of your student loan.


Year-end bonus season at work could be another opportunity to consider making additional payments to your loan. If you receive a raise at work, you may consider allocating some of your additional income to paying down your debt as well.


6. Check your employee benefits


Check to see if the company you work for offers student loan employee benefits. Sometimes, typically in large corporations, employers will give qualifying employees a set amount of money each month toward student loan debt. For example, the global beauty product company Estée Lauder announced in 2018 that they would contribute $100 per month towards their employees’ student loans, up to $10,000.


Check with your HR representative to see if this is a workplace benefit your employer offers. If it is, be sure to enroll as soon as you’re eligible.


7. Pick up a side hustle


One great way to pay down your student loan is to earn extra money. Often you’ll discover that picking up a side hustle, something you can do and get paid for while you’re not at work, is the quickest way to start earning extra money.


Some common side hustles include:

  • Selling handmade items on Etsy
  • Offering creative services such as writing, photography, or graphic design
  • Becoming a ride-share driver


Whatever form your side hustle takes, you can take your extra earnings and use them to pay down the principal of your loan.



Remember: A little bit goes a long way when paying off your student loans. Even an extra $10 added to your monthly student loan payment is beneficial. Your small and steady actions will make a big impact in the long run.


For informational purposes only and not intended as financial advice. Please contact your financial advisor before making any decisions.



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