Last Updated on January 19, 2023
Paying your student loans quickly can save you a lot of money.
The most common way to pay a student loan is through a monthly payment plan. But if you’ve found yourself struggling to make this type of payment—or if you’re just fed up with being in debt—there are other options.
Whether you’re looking for a way to make your payments more affordable or just want to get out of debt as fast as possible, we’ll walk you through the pros and cons of each option so that you can make an informed decision about how to pay your student loans quickly.
How To Pay Student Loans Quickly
How to Pay Off Student Loans Fast: 12 Options
If you’re eager to start paying off your student loans, explore these 12 techniques to find the best way to pay off student loans for you:
- Pay More Than the Minimum
- Refinance Your Student Loans
- Make Biweekly Payments
- Pay Off High-Interest Loans First
- Take Advantage of Interest Rate Reductions
- Create a Budget
- Work for an Employer With Repayment Assistance
- Avoid Extended Repayment Terms
- Utilize Tax Deductions
- Make Lump Sum Payments
- Use Loan Forgiveness Programs
- Join the Military
1) Pay More Than the Minimum
Paying more than the minimum and putting the extra money toward reducing your principal balance is the fastest way to become debt free.
This strategy lowers the remaining amount due and, because interest is calculated on your remaining balance, reduces total interest owed.
You can set up an automatic monthly payment for more than the minimum to ensure you always pay a little extra. You can also take extra money you earn, such as a year-end bonus, and apply it to your loan balance.
2) Refinance Your Student Loans
Refinancing involves getting a new loan at a lower interest rate. If you keep payments the same or increase them, but reduce your interest rate, you’ll pay less in interest in the long term. And more of your payment will go toward reducing the principal balance with student loan refinancing.
You give up important protections on federal student loans by refinancing such as the ability to use an income-driven repayment plan, and you need to qualify for a new loan based on your income and credit score. However, if you’re eligible, the savings from a lower interest rate can be substantial.
If you want to learn more about refinancing, you can check out our guide to the best places to refinance student loans, or compare some lenders below.
Student Loan Refinance Options
- Refinance both federal and private student loans
- Get a quick rate estimate in 2 minutes
- Rates starting at 1.74% APR
- Competitive interest rates
- Offers 12 months of student loan forbearance
- Referral bonus of $400
- Cosigner release after 36 on-time payments
- No fees
- Loan amounts up to $500,000
3) Make Biweekly Payments
Instead of paying your loan monthly when the payment is due, you can divide your required payment in two and pay it every two weeks.
This little trick does help you pay off your student loans faster because you will end up making 26 payments, which amounts to 13 months’ worth of payments instead of the 12 you would have paid with once-a-month payments.
4) Pay Off High-Interest Loans First
Some of your student loans may charge interest at a higher rate than others. If you can pay those more expensive loans with higher interest rates off first, you’ll save more on your total interest.
While you’ll need to pay the minimum on every loan you hold, putting any extra cash towards your highest interest loans first helps pay them down faster. That leaves loans with your lower interest rates to accrue interest for a longer period of time, rather than the loans with the high interest rates.
5) Take Advantage of Interest Rate Reductions
Many student loan servicers provide a deduction on interest if you set up auto-pay. Some also reduce interest after you’ve made a certain number of on-time payments.
Interest rate reduction programs vary among lenders, so find out what your options are with getting your lender to reduce your rate. And remember, even a slight interest rate reduction can make a big difference if you’re dealing with $100K in student loan debt.
6) Create a Budget
With a budget that includes student loan repayment, you’ll be more mindful where your money goes and can plan for more money to be put towards paying off student loans early and you can eliminate debt faster.
To create a budget, track your spending to see where you’re going overboard. Budget for necessities first, such as rent and food. Then, work some money into the budget for extra student loan payments before allocating for your wants.
When you abide by your budget and make extra payments every month, your student loan debt will disappear more quickly.
For help following a budget, consider using a student loan app.
7) Work for an Employer with Repayment Assistance
Employer student loan repayment assistance is growing in popularity as a workplace benefit. Employers who offer this benefit pay a certain amount of money towards employees’ student debt each month. Amounts vary, but typically employers offer around $100 to $300 monthly.
When you work for a company that offers this benefit, keep paying the minimums yourself and use the extra funds from your employer to pay down the balance more quickly.
8) Avoid Extended Repayment Terms
Many federal student loan repayment options, including income-based plans, extend the time to pay off your loan.
While this can make your monthly payment lower and help in times of financial hardship, it’s best to avoid extended plans if your goal is to pay off your loans faster. You’ll pay more in interest when you stretch out your repayment period, and it will take years longer to become debt free than if you stuck with the standard plan.
9) Utilize Tax Deductions
For most student loan borrowers, you can take a tax deduction of up to $2,500 annually for student loan interest. When you take this student loan interest tax deduction based on the actual amount of interest you pay, it reduces your Adjusted Gross Income (AGI), so you pay less in taxes.
However, if your income exceeds $70,000 as an individual or $140,000 if you are married filing jointly, you lose part of the deduction. And you lose the full deduction if you make at least $85,000 as an individual or $170,000 if married filing jointly.
10) Use Extra Cash to Make Lump Sum Payments
A LendEDU survey found that over half of student borrowers who are able to pay off their student loans in one to five years made at least one lump sum payment of at least $5,000, making this one of the best strategies for paying off student loans fast.
When you come into some extra money for example from a tax refund, don’t spend the cash. Instead, put the funds towards paying off your student debt with extra payments or a larger payment. This will reduce the principal balance you owe, so it will reduce your interest and the outstanding amount you have to pay back.
11) Use Loan Forgiveness Programs
If you work in a qualifying public service job, you can get your debt forgiven after you make 120 on-time payments. This strategy does require you to pay for about a decade. But, after about 10 years, you can have your remaining balance, which allows you to become debt free much faster. Public Service Loan Forgiveness has strict criteria, so know the rules if you want the government to forgive part of your debt.
There are also other student loan forgiveness programs that you may be eligible for; just be sure to read the fine print before pursuing one of these options.
12) You Can Join the Military
If you join the military with some student loan debt, you may be able to pay it off using the GI Bill or another form of relief, such as military student loan forgiveness.
Typically, you’ll need to commit to a certain number of years in the active military to get help with your debt. Research some of the different programs to find out requirements and explore your options.
student loan forgiveness
Student loan forgiveness programs
1. Income-driven repayment forgiveness. The federal government offers four main income-driven repayment plans, which allow you to cap your loan payments at a percentage of your monthly income. When enrolled in one of these plans, your remaining loan balance will be eligible for forgiveness after 20 or 25 years, depending on the plan. These plans are most beneficial for those with large loan balances relative to their income. Only 32 borrowers have received loan forgiveness through income-driven repayment forgiveness, according to the National Consumer Law Center. This forgiveness was made tax free retroactive to Dec. 2020 through the end of 2025, as part of the March 2021 American Rescue Plan. However, most borrowers will not qualify for forgiveness through income-driven repayment until the early 2030s.
2. Public Service Loan Forgiveness. Public Service Loan Forgiveness is available to government and qualifying nonprofit employees with federal student loans. Eligible borrowers can have their remaining loan balance forgiven tax-free after making 120 qualifying loan payments. Until Oct. 31, 2022, the Education Department has expanded which payments on federal student loans count toward PSLF through a limited waiver; now, payments on FFEL and Perkins loans, late payments and payments made on any repayment plan will retroactively count as qualifying payments.
3. Teacher Loan Forgiveness. Teachers employed full time in low-income public elementary or secondary schools may be eligible for Teacher Loan Forgiveness after working for five consecutive years. They can have up to $17,500 in federal direct or Stafford loans forgiven. To qualify, teachers must have taken out loans after Oct. 1, 1998.
4. Student loan forgiveness for nurses. Nurses shouldering student debt have several options for student loan forgiveness: Public Service Loan Forgiveness, Perkins loan cancellation, and the NURSE Corps Loan Repayment Program, which pays up to 85% of qualified nurses’ unpaid college debt. Public Service Loan Forgiveness may be the most likely option for most nurses — few borrowers have Perkins loans, and the NURSE Corps program is highly competitive.
5. Obama student loan forgiveness. There’s no such thing as “Obama student loan forgiveness.” However, some student “debt relief” companies use it as a catch-all term for free federal programs — which they charge to enroll borrowers in. If you encounter a company offering “Obama student loan forgiveness,” consider it a red flag. Enrolling in federal programs like income-based repayment and federal student loan consolidation is free to do on your own through the Department of Education.
