8 Ways to Pay Off Student Loans Quickly

Posted by: TheGuarantors on November 30, 2021

Student loans are often an essential way to help fund your higher education. While this kind of financial aid can be a huge asset, it can also feel like a big financial burden. Paying off your student loan can be a huge undertaking and you may be trying to figure out how to pay it off before the repayment period is up. However, this will depend on the amount you have borrowed, how much you have left to pay off, your income, and how much you can afford to pay off each month. Read on to know eight ways you can pay off your student loan quickly.

How can I pay off my student loans faster?

Paying off your student loans quickly

1. Pay more than the minimum installment each time

Student debt stress can be difficult to deal with. One of the ways to pay off student loans faster is by paying over and above your monthly installment. You don’t have to contribute a significantly larger amount than what is owed, even smaller amounts can go a long way to reducing your overall debt. If you're able to do this, make sure any extra money to pay off is put towards paying off the loan principal itself and not the interest owed.

2. Use autopay to reduce your interest rate

Most student loan service providers give you the option of signing up to autopay every month. This is one of the best ways to pay student loans off because you won’t ever miss a monthly payment. Which helps you keep your credit score up! And most service providers will also give you a 0.25% reduction. While this might seem like a small percentage, this will make a difference to the amount of money you save when you pay your loan back over several years.

3. Refinance to pay off your student loans

By refinancing, you can get a loan that has a shorter repayment period. It might mean you have to make larger repayments every month, but with a lower interest rate and a shorter time period, you'll be able to reduce your student debt stress. You can use a student loan payoff calculator to see exactly how much you will owe each month to finish paying off student loans fast.

4. Check your repayment plan

At first glance, repayment plans that have smaller monthly payments may seem like a boon. But paying your student loan off this way will take you a long time. If you want to get rid of the debt fast, you should avoid income-based repayment plans and instead opt for larger repayment plans.

5. Seek help from your employers

Some jobs like those in public service such as nurses, doctors, lawyers, and federal agency employees "forgive" student loans or provide assistance with paying them off. In some cases, private employers can also offer student loan assistance as an employment benefit. Make sure to speak to your supervisor and negotiate the best way to pay student loans with help from your employer.

6. Switch to a bi-weekly payment scheme

If you switch to making two payments a month instead of one lump sum, you'll be able to pay off student loans a little faster. And you'll save money on the interest you accrue as well!

7. Get a side job to help pay off student loans

If your current job does not allow much scope for a higher income presently, you might be able to pay more of your loans by earning more money on the side. Selling old equipment, working part-time, or renting out your apartment for short periods of time are good ways to pay off student loans. By using a student loan payoff calculator, you can figure out just how much extra you should be making each month.

8. Make more payments

Even if you're paying more than the required minimum amount each month, making extra payments on top of that can help ease your student debt stress. While it may be hard to save up such large amounts, you can use extra cash that comes in on your birthday or a tax refund to make these payments.

The best way to pay student loans will vary depending on your circumstances. This article should have given you some starting points to help you. However, you may wonder if paying off student loans at the earliest opportunity is the best thing to do. Read on to find out.

Is it better to pay off student loans right away?

Paying off student loans right away

Depending on your current employment situation, how many other loans you have, and your long term plans, it may not be in your best interest to pay off student loans immediately. Here are the key points you should keep in mind:

Credit Card Debt: If you have any credit card debt that you still owe, you should prioritize paying that off first. This is because you're probably paying more interest on that debt than you are on your student loans.

Savings and Emergency Funds: Make sure you have a contingency plan for emergencies before spending all your spare money paying off student loans.

Retirement Fund: If you're working for an employer who gives you a 401(K), make sure you put money toward it to match what they give you. This allows you to provide for yourself in your retirement.

With all of this information at hand, you should be able to decide if you want to pay off student loans early and which methods you can use to help you.