We can all agree on one thing: student loans are incredibly frustrating.
If you have student loan debt, you know the feeling. It may feel like no matter how hard you are trying, progress is slow. Your principal loan is slowly diminishing, but all of your payments seem to be eaten up by interest.
It might feel like the process of paying back your student loan debt could last a lifetime.
But with some smart money moves and a stronger strategy, you can pay off your student loan debt even faster.
Here are 5 specific ways you can pay off your student loans faster.
1) Prioritize Your Loans by Interest Rate
Depending on your student loans, it is possible that you have multiple loans with different interest rates. To find out what your interest rates are, you’ll need to check in with each of your student loan providers. They should be able to provide you with a breakdown of all your debt and their interest rates.
You can pay off student loans faster by prioritizing the ones with the highest interest rates first. By doing so, you will pay less in interest over the long-run. You can use our free student loan spreadsheet below to gather and compare all your student loan data.
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Not sure where to find information on your student loans? We explain how to find all of them in this post.
2) Break Up Your Payments
Breaking up your payments is an incredibly easy thing to do. Even if you can’t pay more than the minimum payment, this tip can help you pay off your student loans faster.
Say, for instance, that you are required to pay a $300 minimum monthly payment to your student loans. Most of us will pay that once a month. But by taking that payment and splitting it up into multiple, smaller payments throughout the month, you can actually save money in interest and pay more towards the principal.
Instead of paying $300 once a month, try paying $150 twice a month, or even $75 a week. That way, you will be able to pay down the interest and principal before your next payment, so more of your second payment can be applied to the principal.
3) Refinance
Refinancing your loans could be one of the most effective methods of paying off your student debt faster. Refinancing means that another company essentially buys out your debt from your current student loan provider, with the goal of giving you a lower interest rate. This is good for you because it allows for more of your student loan payments to go straight to the principal, costing you less overall in interest.
The best part is that you can get a free rate quote online. SoFi is a popular student loan refinancing company that allows you to see what interest rates you are eligible for and how much you are projected to save all before you finalize the refinance.
Keep in mind that refinancing means losing out on benefits of federal student loans like income-driven repayment, and loan forgiveness options.
4) Pay Down the Principal First
Do you know how your extra student loan payments apply? When you make your regular monthly payment, it will pay off any accrued interest first and then the remainder of the payment will go to the principal.
But if you make an additional payment, you will want to be sure that your money is being applied to the principal loan and not any future accrued interest. Many student loan servicers already do this, but it’s a good idea to check to be sure.
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5) Earn More Money
What if you could throw an extra $100 a month towards your student loans. What about $500? $1,000? How much faster do you think you could get them paid off if you had some extra cash?
Making extra money is a powerful tool to speed up your student loan repayment process. You aren’t limited to what you earn at your full-time job. By starting a side hustle today, you can pay off your student loans significantly faster, plus the extra cash can help you meet all of your other financial goals.
And there is no shortage of ways you can make extra money. You can start a side hustle like blogging or freelance writing. You could work a part-time job or drive for Uber. Or, if you’re creative, you could sell homemade products on a platform like Etsy. The possibilities are endless, so it’s really up to you to decide how you want to earn extra cash and to commit.
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Bonus: Put Any Extra Cash Towards Debt
Got a raise? Birthday money? Tax refund? Put it all towards your student loan debt.
If you can learn to live on what you already have, then any extra money you come into doesn’t have a planned use. You won’t miss that money, since you weren’t planning on that income, so throw it all towards your student loan debt.
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What tips do you have for getting out of student loan debt? Do you think you could use any of these tips to get debt-free faster?
I’d also add – live with your family, if possible. Being able to do this allowed me to save a lot of money, since I didn’t have to pay rent. This really helped.
That’s a great tip! I know a few people who have lived with their family and said it wasn’t bad, so long as they had discussed boundaries ahead of time. It could definitely save a lot of money.
Just as the last bullet point suggests, I put any extra money towards my debt. Even a penny I find on the ground! But I don’t run to the bank as soon as I find a penny – I’d end up spending more on gas. Instead I wait until I need to make a trip anyway. Then, I use the bank’s (actually a credit union) change machine (similar to a CoinStar) to deposit my loose change.
Every penny truly helps! When I was growing up, my family used to always save state quarters and we made it a competition to see who could find the most. At Christmas time, my mom took the quarters to the bank and split the difference. We usually ended up with a few hundred of dollars each year in just quarters, which is pretty amazing!