5 Tips to Aggressively and Effectively Pay Off Student Loans

Picture of Ben Luthi

Before You Read, Lower Your Student Loan Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.
Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

Before You Read, Lower Your Student Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.

Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

Student loan debt can be a significant burden — on your finances and your life.

And with repayment plans often lasting 10 years or more, it can be difficult to see the light at the end of the tunnel.

Fortunately, there are some things you can do to accelerate the debt repayment process while potentially saving hundreds or even thousands of dollars in interest.

Depending on your situation, you may able to take specific actions to aggressively pay off your student loans or simply become more effective at it.

If you believe you have what it takes to pay off your student loans early, here are essential tips to help you achieve your goal.

How to aggressively pay off student loans

Depending on how dedicated you are to eliminating your student debt, taking advantage of these tips can help you pay off your loans several years earlier.

But even if you’re just looking to pay off student loans more effectively and efficiently without putting all your financial energy into it, you can still save money in the long run.

1. Earn more money

If you have the opportunities and time to do it, finding ways to earn extra money can make a big difference in your debt payoff plan. Ideas include:

  • Taking on a second job
  • Starting your own side business
  • Working overtime with your current job
  • Finding odd jobs on Craigslist, TaskRabbit, or similar websites
  • Becoming an Uber or Lyft driver, a virtual assistant, or other side gigs
  • Selling belongings you no longer need

You may also consider using your talents to become a freelancer. Whether it’s writing, editing, graphic design, crafting, or whatever else, you may be able to turn something you do as a hobby into a profitable freelance opportunity.

Also, take a look at the cash windfalls that you might receive throughout the year. For example, if you regularly receive a tax refund or a performance bonus at work, consider using that money to pay down your student loan debt rather than spending it. It’s not necessarily extra money that you have to work more to earn, but it’s extra cash for your budget and can help you aggressively eliminate your debt.

2. Cut back on discretionary expenses

Finding ways to spend less is always a good plan if you’re trying to pay down debt faster. If you’re in a situation where you don’t spend much beyond your necessities, it’ll likely be difficult to cut even more.

But if you find yourself spending hundreds of dollars every month on entertainment, eating out, unnecessary online shopping, and more, you may be able to take some or all that money and put it toward your debt instead. Create a budget to find the right balance each month.

Of course, life can be challenging and cutting back too much on fun discretionary spending could make it difficult to stick to your plan. To avoid losing momentum, allow yourself some luxuries now and then.

3. Make interest-only payments during deferment or forbearance

If you’re still in school or you’ve received a deferment or forbearance, making interest-only payments during that time can save you a lot of time on your repayment length and money on interest costs.

That’s because, in most cases, interest continues to accrue during deferment or forbearance — the exception is if you have subsidized federal loans, in which case the U.S. Department of Education covers your interest during deferment periods.

At the end of your deferment or forbearance period, the interest that accrued will capitalize and be added to the principal balance of your loan. This means that you’ll effectively be paying interest on interest charges for the remainder of your repayment term. It’ll also result in a higher monthly payment.

By making interest-only payments, you’ll avoid having those costs capitalized and added to your loan balance. Also, your monthly payment will stay the same, ensuring all the extra money that you put toward your debt will go directly toward paying down the principal balance.

4. Set up automatic payments

Many student loan servicers and lenders offer an interest rate discount when you set up autopay. This is because they’re more likely to receive on-time payments when they’re automatically drawing them from your checking account.

In most cases, you can expect a 0.25% reduction in your interest rate, which isn’t going to make a huge dent in your interest paid. For example, if you have $30,000 in student loans with an average interest rate of 6.5%, dropping that rate down to 6.25% would save you just $456 over 10 years.

But it’s a simple way to save some cash, and combined with other repayment strategies, the savings from all your efforts combined can add up fast.

5. Refinance your student loans

Refinancing your student loans with a private lender could be a smart repayment solution for a couple of reasons.

First, you may be able to qualify for a much lower interest rate than what you’re currently paying, which will give you a lower monthly payment.

If this happens, you can continue making your original monthly payment, and the extra amount will go toward paying down the principal balance.

Second, you can also request a shorter repayment term than what you currently have. Just be sure before you apply that you can afford the higher monthly payment. For example, if you have $16,000 in student loans with a 5% interest rate and a 10-year repayment term, your monthly payment is $170.

But if you shorten that to five years with the same interest rate, your payment will jump to $302. But, you’ll also be debt-free five years sooner and save $2,248 in interest!

The bottom line

There’s no single best way to learn how to aggressively pay off student loans because everyone has a different financial situation. But as you research how these tips and other strategies can help you, it’ll be easier to find the right path for your needs.

If you’re considering student loan refinancing and have federal loans, make sure you don’t need the perks provided by the federal government, including access to loan forgiveness programs and income-driven repayment plans.

Also, take some time to compare rates from more than one lender before you apply. This will help you make sure you’re maximizing your savings with the lowest interest rate and best repayment terms.

To accomplish this quickly and easily, use Purefy’s Compare Rates tool to get rate offers from multiple lenders in one place, with no credit check required.

You Might Also Like
Purefy - Compare Private Student Loan Consolidation & Refinance Options Quickly & Easily


Student Loan Refinance

Today’s Rates Starting From 4.49% APR1

Take the guesswork out of shopping for a student loan refinance. Compare real prequalified offers from multiple top rated lenders in 2 minutes with no impact on your credit score.

Compare Student Loan Refinance Rates From Top-Rated Lenders

  • Hidden
  • Hidden
No impact on credit — get results in 2 minutes.
the best rates

Want To Find Out When Student Loan Refinance Rates Drop?

Join our email list to get instantly notified when rates change.

I am a(Required)