2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More
2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More


10 Strategies to Pay Off Student Loans Fast

Kat Tretina
pay off student loans fast
pay off student loans fast
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Student loan debt can be a crushing burden. Worrying about keeping up with your payments can cause you to put off your other goals. In fact, a study from Saving for College found that student loan debt causes people to delay getting married, having children, or even buying a home.

Paying off your debt as soon as possible can help you achieve financial freedom. However, paying off your loans early takes commitment. If you’re willing to do the work, here are 10 ways you can pay off student loans ahead of schedule.

1. Refinance your student loans

If you have high-interest student loan debt, student loan refinancing can help you accelerate your repayment. With refinancing, you work with a private lender to take out a loan for the amount of your current debt. The new loan has different repayment terms and a new interest rate, allowing you to save money.

For example, let’s say you had $40,000 in student loans at 8% interest and a 10-year repayment plan. Over the course of your repayment, you’d pay a total of $58,237.

But if you refinanced your loans and qualified for a 10-year loan at just 5% interest, you’d pay a total of $50,911. Taking just a few minutes to submit a student loan refinancing application would help you save over $7,300.

If you decide that refinancing is right for you, make sure you compare offers from multiple lenders to get the best rates. Purefy’s rate comparison tool allows you to review offers from several different lenders at once so you can make an informed decision.

Is Student Loan Refinancing Right for You?

Find out how much you can save with these top lenders

Precision Pricing: Pick Any Term Between 5—20 Years

Fixed Rate:

2.98% - 5.79% APR

Variable Rate:

1.99% - 5.64% APR


5 - 20 years

Minimum Income:

No minimum

Loan Limits:

$5,000 - $500,000

Refinance Student Loans With Your Spouse

Fixed Rate:

2.99% - 5.15% APR​

Variable Rate:

2.17% - 4.47% APR​


5, 8, 12, or 15 years

Minimum Income:

No minimum

Loan Limits:

$7,500 - $300,000

Loans Available Nationwide — Not Just for Iowans

Fixed Rate:

2.55% - 6.42% APR​

Variable Rate:

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5, 7, 10, 15, or 20 years

Minimum Income:

No minimum

Loan Limits:

$5,000 - $300,000

2. Launch a side hustle

If you’re living paycheck to paycheck, there may not be any more corners to cut. Instead, focus on increasing your income by taking on a part-time job or launching a side hustle, like delivering groceries with Shipt or Instacart, driving passengers with Uber or Lyft, or walking dogs with Wag!. Even if you only make an extra $100 a month, that additional money can make a big difference.

For example, let’s say you had $30,000 in student loans at 6.8% interest. On a 10-year repayment term, your minimum payment would be $345. But if you picked up a side hustle and were able to put $100 worth of earnings toward your loans each month — making your payment $445 per month — you’d pay off your loans nearly three years ahead of schedule. Even better, you’d save over $3,500 in interest charges.

3. Follow the debt avalanche method

The best way to pay off your loans and save money is to follow the debt avalanche method. With this approach, you list all of your student loans and order them by interest rate. You continue making the minimum payments on all of the loans, but you put any extra money you have toward the loan with the highest interest rate first.

Once you pay off the loan with the highest rate, you take that payment you were making and apply it to the loan with the next highest rate. This strategy helps you save the most money on your debt.

4. Put your tax refund toward your student loans

Your tax refund can be a major windfall for you. According to the IRS, the average tax refund was $2,729 in 2019. If you put that money toward your loans, you could reduce your repayment term and save money.

For example, pretend you have $35,000 in student loans at 6% interest and a 10-year repayment term. If you used your $2,729 tax refund to make a one-time payment on your loans, you’d pay off your loans 13 months ahead of schedule. And, you’d save over $2,000 in interest charges.

5. Sign up for automatic payments

Signing up for automatic payments is a smart idea. It lessens your risk of missing a payment, and many lenders offer a 0.25% interest rate deduction as an incentive. That interest rate reduction may not sound that impressive, but over time, it can help you save hundreds of dollars.

6. Ask your employer for help

More and more companies are recognizing that student loans can be a significant source of stress on employees, reducing their job satisfaction and productivity. As a result, some companies are offering student loan repayment benefits to their employees. Employers will actually offer employees a monthly contribution toward student loans.

Talk to your company’s human resources department to see if student loan repayment benefits are available.

7. See if you qualify for repayment assistance

If you’re a teacher, healthcare professional, or lawyer, you may qualify for student loan repayment assistance from your state. Many states will pay off some or all of your student loans if you agree to serve in a high-need area for a set service commitment.

For example, primary care physicians in Iowa can qualify for up to $40,000 in student loan repayment assistance per year if they agree to work for at least five years in an eligible service commitment area.

To find out if you’re eligible for similar programs, visit your state department of education website.

8. Pay more than the minimum

If you only make the minimum payment on your student loans, it will generally take you at least 10 years to repay your debt. To cut down on your repayment term and to save money, try to pay more than the minimum each month.

Even if you can afford to only put an extra $20 per month toward your debt, the savings can be dramatic.

Let’s say you had $40,000 in student loans at 6% interest. On a 10-year repayment plan, your monthly payment would be $444. If you paid an extra $20 each month toward your loans — making your payment $464 — you’d pay off your loans six months early. And, you’d save over $800 in interest charges.

9. Get a roommate

Your rent or mortgage payment is likely your biggest expense, eating up a significant portion of your income. In fact, the average rental costs $1,465 per month, according to Rent Cafe. With so much of your paycheck going toward keeping a roof over your head, there’s probably not much left over for your student loans.

You can cut your housing costs in half by getting a roommate and using the money you saved to make extra payments toward your student loans. While sharing your living space may not be ideal, making sacrifices for a few years can help save thousands of dollars over time.

10. Take advantage of the student loan interest tax deduction

If you’ve been making payments toward your student loans that cover both principal and interest, you may qualify for the student loan interest tax deduction. You can deduct up to $2,500 of interest you pay on your loans throughout the year.

The tax deduction reduces your tax bill. Depending on your tax bracket, it could help you put up to $550 back in your bank account. Use that money to make extra payments on your loans, and you’ll save even more.

Managing your student loans

Your student loan debt can be a major problem in your life. However, by focusing on repayment strategies, you can pay off your student loans fast so you can pursue your other goals in life.

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