Trick to Pay Off Educational Loan Faster this year

Paying off Student Loans Faster

One thing we can all agree on: Paying off student/educational loan debt isn’t fun.

One of the worst feelings is tearing open your paycheck or seeing your direct deposit hit your bank account, only to remember that you need to use a huge chunk of that money to pay your student loan debt.

With student loan debt, it might seem like this feeling could last forever — but it doesn’t have to. If you want your debt to go away faster, you’re going to have to upgrade your student loan repayment strategy.

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

  • Making more than the minimum payment
  • Consolidating or refinancing your student loans
  • Making a lump-sum payment when you come into extra cash
  • Taking a job that makes you eligible for loan forgiveness
  • Using any raises you earn to increase your student loan payments
  • Cutting your budget and increasing your loan payments
  • Working a side gig and using the extra income to repay your loans

To learn more about these options for student loan repayment, and to get a few other tips, here’s our guide to paying off student loans faster with 15 strategies that will work for just about anyone.

1. Earn 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.

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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. Calculate 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 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.

Deciding where to refinance your student loans can be difficult. That is why LendEdu helps borrowers compare refinancing options available and offer the best options.

All of the banks and lenders listed below allow borrowers to refinance student loans, as well as consolidate them during the process.

Both private and federal student loans can be refinanced with a private lender. If you don’t meet the requirements of a certain lender, a creditworthy cosigner can increase your approval odds and help you receive a lower interest rate.

Each student loan refinance lender has its own specific underwriting criteria, so your approval odds may be higher at one lender than another. Detailed reviews of the best student loan refinance companies can help you better compare your options to ensure you find the lowest rate, friendly repayment terms, and more.

The best lenders listed below are determined by LendEdu’s Editorial Ratings which analyze over 20 data points from the refinancing companies. These ratings are completely objective and are not influenced by compensation in anyway.

Here are some of LendEDU’s picks for the best student loan refinancing and consolidation companies:

  • Earnest
  • CommonBond
  • Laurel Road
  • SoFi


Editorial Rating (4.54 / 5.0)

  • Refinance both federal and private student loans
  • Loan amounts have a minimum of $5,000 and no maximum
  • No fees
  • 0.25% interest rate reduction for setting up automatic payments

Fixed APR: 3.89% – 7.89%

Variable APR: 2.55% – 6.97%

Loan Terms: 5 to 20 years

Eligible Degrees: Undergraduate & Graduate

Cosigner Release: No


Editorial Rating (4.53 / 5.0)

  • Refinance both federal and private student loans
  • Loan amounts from $5,000 to $500,000
  • No fees
  • 0.25% interest rate reduction for setting up automatic payments

Fixed APR: 3.67% – 7.25%

Variable APR: 2.69% – 7.43%

Loan Terms: 5, 7, 10, 15 or 20 years

Eligible Degrees: Undergraduate & Graduate

Cosigner Release: Yes; after 36 on-time monthly payments

Laurel Road

Editorial Rating (4.44 / 5.0)

  • Refinance both federal and private student loans
  • Loan amounts have a minimum of $5,000 and no maximum
  • No fees
  • 0.25% interest rate reduction for setting up automatic payments

Fixed APR: 3.37% – 7.02%

Variable APR: 2.80% – 5.90%

Loan Terms: 5, 7, 10, 15 or 20 years

Eligible Degrees: Undergraduate & Graduate

Cosigner Release: Yes; after 36 on-time monthly payments


Editorial Rating (4.43 / 5.0)

  • Refinance both federal and private student loans
  • Loan amounts have a minimum of $5,000 and no maximum
  • There are no fees when you refinance student loans with SoFi
  • 0.25% interest rate reduction for setting up automatic payments

Fixed APR: 3.90% – 8.02%

Variable APR: 2.54% – 7.28%

Loan Terms: 5, 7, 10, 15 or 20 years

Eligible Degrees: Undergraduate & Graduate

Cosigner Release: No

The full article on refinancing your students loan can be found here:Refinance Student Loans: Compare the 8 Best Companies

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 estimated 70 percent of those who get cash windfalls spend all of it within a few years.

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 percent.

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. This is great because it’s basically free money. 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 forgivenessfor 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-based 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 for pay raise

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 take one-half of your raise amount and put it 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 you 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 here.

8. Reduce 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 budget drastically.

For example, Stephanie paid off $35,000 in debt in three years by moving to a cheaper apartment, skipping happy hours or meals out, and earning more side income.

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 working extra jobs

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 going in 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 percent 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.

Smart Ways to Manage Your Student Finances

Being a student isn’t exactly cheap. You have to pay for your tuition, and then there’s rent, food, books and all of your other expenses. Managing your money well can help to make it easier to survive financially, whether you’re working or trying to survive with student loans alone. With just a few tricks and techniques, you can make sure your money will cover your expenses and that you can make it go as far as possible. Some people might even be able to have some savings if they’re smart enough with their finances. Try these methods to keep your money organized during college.

Get Banking Right

A bank account is essential if you want to ensure your finances are in order while you’re studying. It gives you somewhere for your money to come in and an easy way to pay for all of your expenses. A student bank account is ideal, giving you a checking account that has been designed for people to use during their studies. You can get benefits that you might not get on other accounts, such as no minimum balance requirement and no monthly maintenance fee. You can browse the range of accounts available to students to find the right one for you.

Use a Budgeting App

Being able to budget is something a lot of people pick up in college, but many don’t manage it. It’s an essential skill to have, so it’s best to learn how to do it now. If you want to make it easier, you might find that a budgeting app is useful for you. It allows you to use a phone or other devices to manage your money and keep track of your expenses. Budgeting with an app makes it simple to see what you need to pay and even when money is going to leave your bank account.

Save on Your Expenses

Some of your expenses are fixed, and there’s not much you can do to change them. However, other expenses aren’t fixed in place, and you can take steps to try to reduce them. For example, the amount you spend on groceries is easier to control. There’s a reason that students are known for living on instant ramen. You don’t necessarily have to eat the cheapest thing possible to save on your groceries, though. You might be able to find other ways to save too, especially when it comes to optional expenses like socializing.

Avoid Unnecessary Debt

College often means taking on a lot of debt, which you could spend many years paying off. So it makes sense to try and avoid taking on any debt that’s not strictly necessary. More specifically, it’s a good idea to try to avoid using credit cards or other types of short-term debt. They can end up simply getting you into financial trouble if you’re not able to pay off the money you borrow.

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, it can become reality. Now go get it!

Trick to Pay Off Student Loans Faster this year
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Trick to Pay Off Student Loans Faster this year
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?

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