How to Pay Off Student Loans Fast With These 15 Proven Strategies

Last Updated on February 1, 2022 by pf team

Paying off student loans faster can save thousands of dollars in interest, which is a great incentive. However, eliminating the monthly expense of student loan payments also frees you up to do other things.

The average student loan debt is almost $40,000 with average monthly payments of nearly $400 per month. For some students and grads, the numbers are even higher.

Consider the 15 proven strategies below on how to pay off student loans fast so you can save money and move on to accomplishing your goals. Having a part time job from home can also help you pay your student loans faster.

how to pay off student loans
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Find out your student loans balances

The first step in building a plan is to find out how much you owe. There are 2 sources for loan balances, depending on the loan type.

For federal loans, you can find your balances through the National Student Loan Data System (NSDLS), which also lets you know which loans are subsidized, if any.

For private loans, you can request a free copy of your credit report from, which provides a free report from all 3 major credit bureaus.

Strategies to pay off student loans faster

You can focus on one strategy or choose multiple strategies that work together to pay down your student loans faster. One key to success is to be realistic.

That means not setting expectations too high, but it also refers to setting expectations too low, which can be just as counterproductive.

Some strategies work better than others, depending on your unique situation, so choose a strategy that fits your goals.

1. Try to make extra payments

It might surprise you to learn how much you can save over time by making extra payments. If you have a standard repayment plan and a balance of $35,000 for a federal loan, your monthly payment is about $371 per month.

However, family size, interest rate, and other factors might affect the monthly payment amount.The payment amount of $371 per month assumes a 5% interest rate and a 10-year repayment schedule.

Paying an additional $100 per month saves $2,586 in interest and shaves 2.5 years off the loan.

An extra $100 per month may seem like a lot, but it works out to about $3 per day. Most of us can cut $3 per day from our spending.

2. Increase your income with a side hustle

If there isn't enough room in the budget to increase your student loan payments or if you just want to increase your income, consider a side hustle.

We're all good at something. Make some money with it, whatever it is. You might start tutoring, landscaping, or even start an online gig.

For example, through online marketplaces, you can find clients and earn income as a virtual assistant, running Facebook ads campaigns and proofreading or copyediting .

Look for opportunities in areas you'll enjoy and which offer a chance to make some extra money. If you enjoy the work, it won't feel like work.

3. Refinance your student loans if you have good credit

If your student loans have higher interest rates, consider refinancing your loans. You can often qualify for better rates if your credit is in good shape.

For example, let's say you have a $35,000 student loan at 7% interest with 10 years remaining on loan payments.

Refinancing at 5% saves over $4,000 in interest if you keep the same term. However, you can reduce the term to 9 years while keeping the monthly payment the same as the original loan.

Reducing the term also reduces the interest you pay. You'll save over $5,200 in interest.

4. Try to make biweekly or weekly payments

Weekly or biweekly payments also increase the velocity of your student loan repayments. Check with your loan servicer to see if they accept weekly or biweekly payments.

If they don't, you can still apply the concept, but you'll have to make extra payments manually. Let's look at a $40,000 loan at 6% with a 10-year term.

at 6%
Monthly$444,08$444,08$13,289.8410 years
Biweekly$222.04$481.09$11,742.669 years
Weekly$119.56$508.13$10,575.378 years
2 months

Biweekly payments use the monthly payment amount.  You divide by 2 and then make payments every 2 weeks.

This method generates an extra payment each year because there are 52 weeks in a year. You’ll make 26 payments instead of 12, with an extra cost per week of less than $10.

With bi-weekly payments, you saved $1,547.18 in interest and reduced the loan term by a year.

With weekly payments, you saved $2,714.47 in interest and reduced the term to 8 years and 2 months. However, many lenders don't support weekly payments.

5. Use debt avalanche or debt snowball methods to pay your student loans

You can use two popular methods for paying down debt if you have student loans, but they often work best if you also have other debt. 

The debt avalanche and debt snowball methods target specific loan balances with a goal of eventually paying off all debts.

If you don't have any other debt, these methods don't apply. However, if you have multiple student loans, they might be a perfect fit.

Debt avalanche

  • With the debt avalanche method, you target the balances with the highest interest rates first.
  • Let's say you have a credit card balance of $1,000 at 20% interest. You're paying $200 per month toward the credit card balance until it's paid off.
  • After you pay off the credit card, you now have an extra $200 per month you can apply to the debt with the next highest interest rate. Over time and as you pay off other debts, you'll have more money available to pay down any remaining debt, like your student loan.

Debt snowball

  • The debt snowball method targets the smallest balances first. Small balances are often easier to pay off, which gives you more money to apply to the next smallest balance. In most cases, your student loan will be the largest debt, which makes it last in line.
  • However, you can pay off a few smaller debts and then make extra payments on your student loans. These techniques can bend a bit to suit your needs.

6. Pay off accrued interest during your grace period and periods of deferment and forbearance

In many cases, you don't have to make payments on your student loan while you are in school or during a 6-month grace period after you leave school.

This grace period is helpful, but can be costly later because interest is accruing. If you don't pay the interest before the end of the grace period, the lender adds the interest to your loan balance.

This often increases your loan by thousands of dollars. Lenders call this capitalized interest, and many borrowers learn about the extra cost the hard way.

You'll save a significant amount of money if you pay the interest as you go. Look for side gigs or a part-time job to prevent the interest from making your loan larger.

7. Enroll in auto-pay deduction

You may find the fastest way to pay off your student debt is a combination of methods. Ask your loan servicer about auto-pay. With auto-pay, the loan servicer automatically deducts the payment from your bank account on a set schedule.

Auto-pay is easier for many people and also benefits the servicer. As a reward, you'll get a small break on your interest rate. Every bit helps and you can often combine auto-pay with other strategies, like biweekly payments.

8. Make a budget and stick to it

To pay off your student loans fast, you'll need a plan. If you're making extra payments or biweekly payments, for example, the extra money has to come from somewhere.

Make a budget that sets a fixed amount of spending for each category and stick to it as much as possible. First, be sure your budget is realistic. 

Look at your past spending and find areas you can cut. Subscription services are a common area where people can cut back. Eating out is another. However, budgets are most effective if they leave a little room for fun.

9. Find a job with repayment assistance

The number of employers that offer repayment assistance grows each year. Much like other benefits, like health insurance or stock options, many employers are embracing student loan repayment assistance because it helps build loyalty.

It can also be a way to attract new talent. After all, not every employer offers repayment assistance.

Most repayment assistance plans make payments directly to the servicer which reduces your student loan balance. Expect these programs to have monthly or annual caps. Many also have lifetime caps.

10. Try to avoid extended repayment terms

Student loans use simple interest, which helps to keep interest costs down, but longer loan terms can have the opposite effect. In particular, beware of deferment, forbearance, and grace periods.

In many cases, interest continues to accrue during these times, even when the loan servicer doesn't require payments. For many borrowers, the interest can also add time to the loan.

Longer loan terms also add to the cost of the loan. Most student loans have a repayment term of 10 years. However, private loans can span as long as 25 years, which can add tens of thousands to the cost of the loan.

11. Take advantage of tax deductions and credits

Don't overlook the tax deduction for student loan interest. If you qualify, the IRS allows you to deduct up to $2,500 in student loan interest for the year.

The deduction reduces your taxable income, which reduces the amount you have to pay in taxes. However, know that the $2,500 cap is per return, not per person.

Because the student loan interest deduction is an “above the line” tax deduction, you don't have to itemize to get the deduction.

Also, be careful not to confuse a deduction with a tax credit. A deduction reduces your taxable income but a tax credit reduces the amount of taxes you pay on a dollar-per-dollar basis. Credits are better.

Currently, there aren't any tax credits for student loans but you may qualify for other credits, which then gives you more money you can use to pay down your student loans.

12. Try to make lump sum payments

You've come into some money, so now you have the perfect opportunity to pay down your student loans. Maybe it's a tax refund because you took advantage of the student loan deduction.

Maybe you inherited some money or maybe someone gave you some money as a present. Work bonuses can also be a great source of money for college loans.

Consider applying that lump sum to your loan. For example, let's revisit the $40,000 loan at 6% interest from earlier. A $500 lump sum payment saves you $400 in interest and shaves 2 months off the loan term.

Bumping up the payment to $2,500 instead takes 10 months off the loan length and saves you nearly $2000 in interest.

13. Take advantage of loan forgiveness programs

Federal loans offer several paths to student loan forgiveness. Each method has its own requirements but many also target specific income groups or occupational groups.

  • Public Service Loan Forgiveness (PSLF)
  • Income-Based Repayment (IBR) Forgiveness
  • Pay As You Earn (PAYE) Forgiveness
  • Revised Pay As You Earn (REPAYE) Forgiveness
  • Income-Contingent Repayment (ICR) Forgiveness
  • Student loan forgiveness for teachers
  • Student loan forgiveness for nurses
  • Loan repayment assistance for healthcare professionals

14. Join the military

Several programs through the military can reduce student debt or eliminate student loans altogether. Here are just a few worth considering.

  • Army Student Loan Repayment: Active Duty program
  • Army Reserve College Loan Repayment Program
  • Health Professions Student Loan Repayment Program
  • National Guard Student Loan Repayment Program
  • Navy Student Loan Repayment Program
  • Air Force College Loan Repayment Program
  • Public Service Loan Forgiveness

Be sure to read the fine print carefully. Military educational benefits are outstanding. However, they also have strict requirements.

15. Make financial sacrifices

If you made a budget (#8), then you probably found a few areas where spending habits could improve. Extra spending rarely seems like a big deal at the time but it can add up to real money at the end of the month.

A gourmet latte at the new coffee shop in town probably costs about $4. Not too bad. But if you buy one every day on the way to work, that's $20 per week. In fact, it adds up to $85 per month.

Similarly, look at other expenses you can cut. Coffee and smoking are among the most expensive indulgences that don't seem expensive. There may be others, however.

For example, memberships and subscriptions are also a black hole in many household budgets. On a larger scale, consider smaller purchases altogether.

Maybe a used car will do the job just fine instead of buying a new car. The savings can help you power through your loan payoff plan even faster.

Final thoughts on how to pay off student loans

Student loans saddle some graduates with debt for decades. The cost of paying for student loans for a longer time is often higher than you might realize. Your first step is to make a plan and build a budget.

Be sure to keep your budget realistic, though, and leave a little room for fun or the occasional emergency. With the right plan in place and a bit of discipline, you can pay off your college loans faster than you might think.

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