8 Best Strategies to Pay Off Student Loans Fast

8 Tips to Help You Pay Off Student Loans FastRecent or soon-to-be college graduates may often find themselves worrying about how they will repay their student loans. Fortunately, students often have around six months before they have to start making payments on their college loans. The time between college graduation and the first payment due date is known as a grace period. This allows college students the opportunity to secure a steady source of income before starting payments. 

However, it’s a smart move to begin making payments even if you still have time left in your grace period. By doing so, you can reduce the burden of student debt as fast as possible and save money on interest. Keep reading to learn these eight best strategies for paying off student loans quickly. 


1. Create a budget

Although budgeting is essential during many stages of your life, it becomes even more important after you graduate. If you didn’t create a budget during college, making one should be your first step. Plan to set aside a significant part of your budget for making monthly student loan payments.

As you transition into life after graduation, it’s normal for your income and expenses to increase slightly. After securing a full-time job, you might also find yourself in a position to afford nicer things. A spacious apartment, newer car, or local fitness center subscription may all seem enticing. However, excessive spending can make it seem like your income didn’t increase at all. 

Creating a budget will help you prevent lifestyle creep from disrupting your ability to make student loan payments. In addition, you’ll want to account for all other expenses. Rent, groceries, transportation, healthcare, retirement savings, emergency fund contributions, and entertainment should all be in your budget. Ultimately, you should design your budget to easily fit your post-graduation expenses and meet your loan obligations. 


2. Consider student loan refinancing

One strategy that can help you pay off student loans faster is to refinance them. Refinancing allows you to consolidate multiple accounts into one new account, often with a new interest rate. You can also transfer a single loan to a new lender. If your current student loan payment strains your budget, refinancing can make monthly payments smaller by extending the length of the loan. Alternatively, you can opt for a shorter loan term. This will increase your monthly payment, but you’ll likely pay off your debt faster.

The primary benefit of refinancing your loans is to achieve a reduced interest rate. When you initially acquired your student loans, your credit score and history may have been limited or nonexistent. After a few years of building credit, you may now qualify for a more favorable interest rate.

However, be careful with refinancing. When you refinance federal loans with a private lender, you will lose all the intrinsic benefits of federal programs, such as student loan forgiveness or income-driven repayment plans. You’ll also lose access to longer deferment or forbearance periods. Therefore, it’s essential to make sure that a student loan refinance aligns with your financial needs and goals before you decide. 


3. Make extra payments towards the principal

Making extra payments each month can speed up your repayment timeline. Any amount that you contribute beyond the minimum payment will have a positive impact on your balance. In the process, supplementary payments also reduce the total student loan interest throughout the life of the loan.

You can begin modestly, like adding an extra $10 dollars to your monthly payment. Gradually, as it aligns with your financial situation, you can increase the amount of the additional payment. You can also eliminate impulse purchases, like eating lunch at a fast-food restaurant. Instead of eating out on a particular day, put the money you would have spent towards your loan payment. Over time, these incremental contributions can help reduce the principal balance.

There is no penalty for paying more than the minimum. However, you must understand how each loan servicer handles additional payments. Some servicers will use your extra payment to advance your due date. This means that the servicer applies the extra amount to cover next month’s payment. To avoid this, you can instruct your servicer to apply overpayments directly to your principal balance and to keep next month’s due date as planned. 


4. Make biweekly payments

Although you might be used to the monthly routine of paying your student loans, consider a biweekly payment schedule. Biweekly payments involve paying half your student loan every two weeks. This may be convenient for budgeting if you also receive your paychecks on a biweekly basis.

Another benefit of making biweekly student loan payments is that it results in one additional payment each year. If you make half-payments every two weeks, you’ll make 26 payments in a year. Those 26 payments are equal to 13 full payments annually. Alternatively, paying once per month would result in just 12 payments throughout the year. 

Dividing your payments in this manner enables you to expedite your repayment schedule. Biweekly payments also result in reduced interest expenses in the long run. Try using a biweekly loan calculator to see how much time and money you can save with this approach. 


5. Turn on automatic payments

Just as you can automate your rent or utility bill payments, you can turn on automatic payments for your student loans. Setting up autopay is great for managing your debt. Automatic payments reduce the likelihood that you’ll forget to make your monthly payment. Autopay will help you complete your payments on time, thus eliminating late fees. Another benefit of autopay is that consistently paying your bills on time can also improve your credit score.

Certain student loan servicers also offer interest rate discounts for borrowers who enroll in automatic payments. The discount may often be a .25% reduction on your interest rate. While the discount may be small, every bit of savings helps contribute to your financial well-being.

Enrolling in autopay can bring peace of mind, while minimizing the paperwork associated with manual payments. Although the savings from autopay are relatively small, when combined with other strategies, it could be extremely beneficial. Whether your servicer is private or federal, remember to ask about any discounts that they may offer.


6. Look into student loan forgiveness

In certain circumstances, federal student loans can be forgiven, canceled, or discharged entirely. If you meet the criteria for forgiveness, you would no longer be obligated to repay your loans. Whether it’s partial or complete forgiveness, any amount of forgiven student loans helps you reach your debt-free life faster. 

You don’t have to be a student or recent grad to get your loans forgiven. Eligibility for programs like student loan forgiveness may also extend to teachers, government employees, or nonprofit workers. There are also programs available to those affected by school closures and those who are permanently disabled. 

For more detailed information on the student loan forgiveness program, visit the Federal Student Aid website. There, you’ll find the application process and eligibility requirements. It’s important to note that if your student loans are from a private lender, you will not be eligible for forgiveness programs.


7. Inquire about employer student loan repayment assistance

Some employers provide student loan contributions or tuition repayment as a benefit to employees. Each year, eligible employees have the opportunity to receive hundreds of dollars to aid in their student loan debt repayment. Employee-sponsored student loan contributions are similar to an employer offering retirement contribution programs. Employers will choose the terms of the benefit, which may include partial, matching, or full repayments.

While it may seem one-sided, these student loan assistance programs are beneficial for both parties. Employees are able to reduce their remaining student loan balance more quickly while adding job experience to their resume. As for employers, they can attract young talent and enhance their appeal to recent graduates.

To determine if your employer provides student loan repayment benefits, you can inquire within your company’s human resource department. If you are beginning your job search after graduation, ask potential employers about the availability of these benefits. Some companies may have plans to implement similar programs in the future. 


8. Make financial sacrifices

If you’re determined to pay off your student debt early, it may require you to make financial sacrifices. To begin, consider cutting out unnecessary monthly purchases. You could evaluate your subscription boxes or streaming services to identify any that you can temporarily live without. 

Furthermore, prioritizing meal planning could lead to savings on grocery shopping or impromptu eating out. Whatever expenses you decide to eliminate, you can redirect the funds towards making additional payments to your principal balance. If you can’t find any more places in your budget to lower expenses, you’ll need to increase your income. 

There are many ways to make money in college, including freelancing skills or securing an on-campus job. Additionally, you can go through your belongings and sell what you no longer use. Try to find something you're passionate about and explore your income-boosting opportunities. These financial sacrifices can contribute significantly to reducing your debt faster and paying student loans early.



Whether you owe $6,000 or $60,000, facing the challenge of paying off your loans as a college student can feel overwhelming. These eight strategies will empower you to take control of your financial obligations. Who knows, committing to pay off your student debt might even inspire your next financial achievement in college

However, some strategies are more widely available than others. Tips like opting for automatic payments or sticking to your budget are easy to incorporate into your routine. Other strategies, like employer-sponsored repayment assistance programs, are a little harder to find and implement. Yet, each student loan repayment strategy is valuable in its own way. Remember that every step you take, no matter how small, brings you closer to achieving your debt-free future.




💰Unsure whether to eliminate student loan debt or boost your savings? Check out Paying Off Debt vs. Saving Money (How to Decide).

🎓Looking to increase your income due to student loans? Read How to Make Money in College.