10 Ways to Pay Off Your Student Loans Faster

Jon O'Donnell Updated on May 7, 2019

Working hard is good – but sometimes working smart is better. This saying applies to many situations, including eliminating your student loans. If you want to pay off your loans faster, you need to be strategic. It’s difficult to put a dent in your debt by just making minimum payments on high-interest loans. We’ve put together 10 tips to help you lower your interest rate, find extra cash, and make progress on reducing your balances quicker.


1.  Take inventory

Start by getting organized. Most people have a general idea how much they owe, but it’s important to add up the total. Know which loans are federal and private. Figure out what the balances, interest rates, minimum payments, and payoff dates are on each loan. Lastly, know what the terms and benefits are. Are you eligible for (or using) any special payment plans, grace periods, deferment or forgiveness options? If so, will they expire in the future? The first step is getting all of this information together in one place.

2.  Consider refinancing

If you’re paying more than 4% interest, you’re probably paying too much. Many people assume the government gives students the best possible deal, but the U.S. Department of Education charges everyone the same interest rate – a one-size-fits-all percentage that has to account for borrowers who won’t finish their degrees or make timely payments. Graduates who are employed pose a much lower credit risk. If your credit score is 650 or higher, you are likely to qualify for much lower rates if you refinance with a private lender. If your own credit isn’t as strong as you’d like, consider getting a co-signer.

Refinancing federal loans with a private lender makes you ineligible for income-based repayment plans and loan forgiveness programs, but the interest savings might be worth it. Even a few percentage points can make a huge difference over the life of a loan. Figure out how much you could potentially have forgiven and weigh that against how much you could save by refinancing. A recent review by Comet found that people who consolidated with private lenders saved an average of $259 a month and $19,231 over the life of their loans.

3.  Embrace minimalism - for now

Short-term sacrifices can help you get out of debt much faster. Figure out what your essential expenses are and take a hard look at your big-ticket items, like housing. It might feel like a positive step to cut back on lattes, but you can often make better progress by cutting back on your bigger expenses first. While it may not be ideal to live with your parents or share space with roommates, doing that for a year or two could free up a lot of money for debt repayment. Once you’ve trimmed the big items, turn your eye to the small stuff – eating out, gourmet coffee, happy hours, travel, cable TV, clothing, etc. It’s easy to forget about recurring payments on your credit card. Cancel any services or subscriptions you don’t use. You also might be able to negotiate a lower rate on your internet and cell phone service by calling the company and threatening to switch providers if they don’t match their rival’s newest promotional offer. Get creative about finding free entertainment and bargain hunting. And remember, it’s not forever.

4.  Enroll in autopay

Most lenders offer a discount of 0.25% off your interest rate if you sign up for automatic bill pay. Enrolling not only saves you money, it also makes it much less likely that you’ll accidentally miss a payment or pay late.

5.  Boost your earnings

If you’ve been at your job for a while, consider asking for a raise. You can improve your chances by researching salaries in your industry and making note of anything you’ve done that has helped your company save or make money. Other ways to bring in more income include:

  • Turn your hobby into a side hustle. Whether it’s baking, doing yoga, DJ’ing, photography, dog walking, website design, or party planning - why not get paid for doing things you enjoy?
  • Sell stuff you no longer use. There’s no shortage of online classified buying and selling sites. Listing things you don’t use on eBay, Craig’s List, Facebook, Kijiji, or other sites can turn your clutter into cash.
  • Participate in the sharing economy. If you have a car or a spare room, consider driving for a service like Uber or Lyft, or hosting travelers through a site like Airbnb.

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6.  Make extra payments

There is no prepayment penalty with most student loans. If you pay more than the minimum or make an extra payment, the surplus amount is generally applied to the principal rather than interest. So any time you get a windfall – a tax refund, bonus, commission, inheritance – consider putting it toward your loans. It will have a big impact on your balance. You can also use gift-giving occasion like a milestone birthday, holiday, or wedding to let family and friends help by contributing to your loan payoff in lieu of gifts. Always apply extra payments to your highest interest loans first and double check your statement to make sure it was credited as an extra payment (all principal) rather than early payment of next month’s bill.

7.  Work for a company that offers student loan benefits

Increasingly, companies are offering student loan help as a perk of employment to attract millennials with in-demand skills. Firms offering assistance include Fidelity, Staples, Aetna, PricewaterhouseCoopers, and Penguin Random House among others. Benefits generally range between $1,200 and $2,000 a year.

8.  Move to a state that has student loan benefits

Some cities and counties are offering student loan incentives to attract college graduates to areas with declining populations or struggling economies. You have to apply and stay for a period of time – usually 5 years – but depending on your circumstances, you could earn up to $15,000 to go toward your student loans. Participating states include Kansas, New York, Tennessee, and Michigan.

9.  Sign up for UPromise and credit card rewards

Upromise has a free “Loan Link” program that awards you cash back for money you spend shopping online, booking travel, and dining out at specific restaurants. The program is sponsored by Sallie Mae and transfers your earnings directly to your student loans each month. The sums are small, but once you register, it’s effortless. And as long as you don’t change your spending habits, it’s free money. If your credit card has a cash back reward program, you can also choose to apply that money to your loans instead of spending it.

10.  Keep an eye on your credit score

As you build your credit history and progress in your career, your FICO score is likely to increase which could make you eligible for even lower interest rates. You can refinance more than once. If your credit profile improves, be sure to get a free quote to see if you can lower your rates even further.

What to do first?

At Comet, we’ve helped college graduates save over $200 million on their student loans. We’ve discovered that while there are many things you can do to get out of debt faster, the one that takes the least time and has the greatest impact is refinancing.

So how do you start? Pick at least three lenders and fill out their online applications. In most cases, it takes less than 5 minutes to get personalized quotes that you can compare side-by-side, and there’s no need to worry about the effect on your credit. The initial inquiry is considered a “soft pull” and has no impact on your score. The following lenders topped our 2017 rankings for best banks offering student loan refinancing, based on a comprehensive 23-point assessment including their interest rates, transparency, product offerings, track records, ease of applying, and customer service.

Find out how much you can save today here:

Published in: Paying Off

About the Author
Jon O'Donnell

Jon is a writer and marketer for Nitro who is passionate about bringing transparency to the student loan process along with providing families with the information needed to make smart financial decisions. He also just recently refinanced his student loans allowing him to pay them off 5 years faster all while saving an additional $152/month. As he continues to pay them off himself, he strives to help others do the same. Jon also has a long history of connecting people with educational opportunities to help them improve their careers and their overall personal finances. In his free time you can find him reading travel blogs and researching destinations around the world in search of his next adventure. Read more by Jon O'Donnell

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Splash Financial is a leader in student loan refinancing with new rates as low as 2.49% fixed APR which can save you tens of thousands of dollars over the life of your loans. No application or origination fees and no prepayment penalties. Splash Financial is in all 50 states and is intensely focused on customer service. Splash Financial is also one of the few companies that offers a great medical resident and fellow refinance product. You can check your rate with Splash in just minutes.

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For every loan they fund, they contribute to the education of a child in need

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  • Unemployment protections - If you lose your job or decide to go back to school, you can delay your payments for up to 24 months.
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SoFi is the leading student loan refinancing provider. 

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  • Minimum credit: 650
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$30 billion+ in refinanced student loans. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, there's no maximum on the amount you can finance. Some state restrictions may apply.

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Ability to apply for cosigner release after 24 consecutive payments. 

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If you’re ready to put student loans in your rearview mirror, Nelnet Bank student loan refinancing offers low rates and flexible terms to help you start getting ahead.

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Connecting student borrowers to a network of over 300 community lenders with low interest rates. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.

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Best for borrowers who want to customize their repayment schedule to pay off debt fast.

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Visit Earnest View Loan Disclosure

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I reduced my student loan payment by $152 per month, by refinancing thru Nitro:

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