How To Pay Off Student Loans Faster

Sara Lindberg Updated on April 25, 2019

If you happen to be one of the 44 million U.S. adults who have student loan debt, making a plan to pay it off in a timely manner can feel daunting, but it doesn’t have to.

By being smart and strategic about how you go about paying down your debt, you can pay off your student loans a little quicker and with a lot less pain. Here are some strategies you can try.

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Refinance your loans

Refinancing your student loans can save you thousands of dollars over the life of a loan. 

By swapping out your existing loan for a new one with a lower interest rate, you’ll be able to direct more of your monthly payment towards your loan principal so you can pay down your debt faster. 

Both federal and private student loans can be refinanced.

Pay more than the minimum

Any amount of money you can add to the minimum payment will help reduce your debt faster. 

If you’ve only been paying the monthly minimum, start by adding $25 to that payment. Each month, increase the amount by $10 until you reach the maximum amount you’re comfortable paying.

Go high-low

This strategy is the exception to the rule when it comes to paying more than the minimum each month. 

If you have multiple student loans, target the one with the highest interest rate and direct your extra payments towards that balance. The goal is to pay this one off first while continuing to make the minimum payments on the loans with a lower rate.

Use your tax refund

Skip upgrading to the latest tech gadget this year and instead put your tax refund to work on debt reduction.

In 2016, the average American received a tax refund in the amount of $3,050. If you take 10% of that refund and apply it to your student debt, it could equal an extra payment. If you do that every year, you could shave months off the back end of your loan, while also reducing the amount you’ll pay in interest.

Double your payments

Here’s another way to “trick” yourself into making an extra payment every year.

Split your monthly loan payments into two half-payments. Then, schedule your payments every two weeks. This simple strategy will result in one extra monthly payment per year.

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Use your raise to pay down debt

If you get a financial boost at work, make sure to set aside a percentage of that additional money to pay down your student loans. Aim for 50% of the increased amount per month. 

Set up an automatic deposit to a savings account or change the amount of your monthly loan payment so the additional money never touches your checking account.

Upromise: online purchases = cash back

Upromise.com is a free shopping portal that also offers Loan Link, a special benefit for Upromise members. Link your eligible loan with your Upromise account and your cash-back earnings can be automatically transferred to help pay down your loan. 

Let's say you earn $300 back in the first year. Maintain that over a decade and you'll have put $3,000 toward your loan debt. 

How it works: Start by signing up at Upromise.com to open your account. Whenever you shop online, start at their website—home to more than 850 retail partners—and search by item or store. Make your purchase and earn up to 5% cash back.

Want to get started on some of these strategies right away? See how much you could save with our Student Loan Refinancing Calculator.

Published in: Paying Off

About the Author
Sara Lindberg

Sara Lindberg, B.S., M.Ed., is a freelance writer specializing in business, finance, health, and wellness. She holds a Bachelor's of Science degree in Exercise Science and a Master's Degree in Counseling. When she’s not writing, Sara can be found at the gym lifting weights, running the back roads to train for her next half-marathon, and spending time with her husband and two children. Read more by Sara Lindberg

Refinance and Save Today With These Lenders

#1 - Nitro Recommended View More Details

Credible is an online marketplace that provides borrowers with competitive, personalized loan offers from multiple, vetted lenders in real time.

  • Free to use, no hidden fees
  • Minimum credit score: 650
  • No refinancing maximum amount
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Visit Credible View Loan Disclosure

Credible is a multi-lender marketplace that empowers consumers to discover student loan refinancing options that are the best fit for their unique circumstances. Our integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 2,000 positive Trustpilot reviews and a TrustScore of 9.5/10. Credible is headquartered in San Francisco, California.

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  • Compare prequalified rates from multiple, vetted lenders in 2 minutes.
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  • Free to use, no hidden fees: Requesting rates can take just minutes and costs you nothing.
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Earnest empowers people with the financial captial they need to live better lives.

  • APR: 2.05% - 6.99%
  • Minimum credit score: 650
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Using technology, data, and design to build affordable products, Earnest's lending products are built for a new generation seeking to reach life's milestones. The company understands every applicant's unique financial story to offer the lowest possible rates and radically flexible loan options for living life.

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#3 View More Details

Operates in all 50 states; 2nd largest student loan refinancing lender

  • APR: 2.25% - 7.02%
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Visit Laurel Road View Loan Disclosure

Laurel Road is a national online lender with customers in all 50 states, the District of Columbia, and Puerto Rico. Many of our non-bank competitors are not able to lend in all 50 states.Laurel Road has grown to be the second largest player in the student loan refinancing space in large part because of our reputation as the go-to low rate provider.

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  • National reach - Online lender that is available in all 50 US states, the District of Columbia and Puerto Rico.
  • No fees & the lowest rates in the space - Laurel Road is the most transparent about the rates they provide customers, and offer the lowest rates where it counts. Our customers will save more than $20,000 over the life of their loans on average. 
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#4 View More Details

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

  • APR: 2.14% - 7.24%
  • Minimum credit score: 660
  • Refinance up to $500K
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Visit CommonBond View Loan Disclosure

CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.

Of all the companies we reviewed, CommonBond has some of the best customer service. The company prides itself on being easy to reach by email, phone, or live chat. It offers networking events, expert panels, insider newsletters, and even has a program help borrowers who lose their jobs to find new ones. CommonBond also makes you feel good about choosing to refinance with them by donating money to an education nonprofit for each loan they write.

CommonBond Student Loan Refinance review

  • Unemployment protections - If you lose your job or decide to go back to school, you can delay your payments for up to 24 months.
  • Social promise - For every loan they fund, they also contribute to the education of a child in need.
  • Hybrid loan option - Offerings include a 10-year hybrid loan with fixed interest for the first five years, and variable interest for the final five.
  • Referral bonus - For every friend you refer who refinances their loans with CommonBond, you’ll earn a $200 cash bonus.
  • Qualification - Borrowers must have graduated at least 2 years prior if they want to apply without a co-signer. And borrowers in 6 states – Idaho, Louisiana, Mississippi, Nevada, South Dakota, and Vermont – cannot currently refinance through CommonBond.

Get a personalized review of your refinancing options with CommonBond today.

#5 View More Details

Offers unemployment protection and career/coaching/networking

  • APR: 2.27% - 7.94%
  • Minimum credit score: 650
  • Refinance up to 100% of student debt
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Visit SoFi View Loan Disclosure

SoFi, which stands for “Social Finance,” was created by a group of Stanford business students who found themselves with a mountain of debt after graduation. They set out to change the student loan industry and help borrowers like themselves to get lower interest rates. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, it has no maximum amount you can finance. However, Nevada residents can’t currently refinance with SoFi. Minimum loan balances are higher in Arizona, Massachusetts and Pennsylvania due to state laws. Additional state restrictions may apply.

SoFi Student Loan Refinancing Review

  • Low interest rates - For well-qualified borrowers, SoFi offers some of the lowest rates we have found.
  • Strong customer service - It has more than 350 customer service reps available to help applicants through process.
  • Career coaching and networking - Perks include career services representatives who can help you find a job or negotiate a higher salary. SoFi also hosts networking events, happy hours and educational lectures on topics like buying a home in major cities around the country.
  • Unemployment protection - Borrowers who lose their jobs through no fault of their own may apply for Unemployment Protection. If approved, SoFi will suspend their monthly SoFi loan payments and provide job placement assistance during the forbearance period. These benefits are offered in three month increments, and are capped at 12 months, in aggregate, over the life of the loan. Note that interest will still accrue while loans are in forbearance.

Find out what interest rate SoFi can offer you here.

#6 View More Details

Works with 300+ community lenders for higher approval chances

  • APR: 2.01% - 8.88%
  • Minimum credit score: 660
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Visit LendKey View Loan Disclosure

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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#7 View More Details

Many ELFI customers save hundreds per month month and thousands over the length of the loan term.

  • APR: 2.39% - 6.69%
  • Minimum credit score: 680
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Visit ElFi View Loan Disclosure

Education Loan Finance is designed to assist borrowers through consolidating outstanding education loans into one single loan that effectively lowers your costs of education and/or makes repayment very simple. Education Loan Finance - backed by the strength of SouthEast Bank - combines the benefits of traditional education loan refinancing with the superior products, service, and support found in the private market.

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Check out their low rates today to see how much you can save.

  • Get Your Rate. With Education Loan Finance's Find My Rate tool, you can complete a short application to receive a preliminary quote on your eligible rates and terms, all without affecting your credit score.
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Special offers for medical resident and fellow refinance products

  • APR: 2.43% - 7.60%
  • Minimum credit score: 660
  • No Maximum when refinancing
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Visit Splash View Loan Disclosure

Splash Financial is a leader in student loan refinancing with new rates as low as 3.25% 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.

  • Low interest rates – especially for graduate students
  • No application or origination fees. No prepayment penalties.
  • Co-signer release program - you can apply for a cosigner release form your loan after 12 months of on-time payments
  • Specialty product for doctors in training with low monthly payment

Click here to see more of Splash's offerings and to see how you can save money.

Comments

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

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