January 13, 2022

How To Pay Off Student Loans Fast

Repayment

The fastest way to pay off your student loans is by paying more than your minimum every month. The more you pay, the less interest you’ll owe and the faster the balance will disappear. In this blog post, we tackle the big question: How to pay off student loans fast.

Start a Budget and Stick with it

If you’re not already doing this, there’s no better time to get started. By sticking to a budget, you may find “extra” money that you wouldn’t have noticed that you had. This is much better compared to finding the odd $10 in your old pants if you’re seriously looking to pay off student loans quickly. The easiest way to get started with budgeting is by downloading a budgeting app, where you can also see the progress you’ve been making as you pay off your student loans.

Refinance if You Have a Steady Job

If you’re looking to pay off student loans fast without making extra payments, you can refinance your student loans. When you refinance, you can replace various student loans with one private loan, and should ideally be at a lower interest rate. You can also speed up your loan by choosing a new loan term that is lower than what remains from your current loans.

Ensure Your Payments are Made the Right Way

While there are no penalties for paying student loans early or for paying more than the minimum, there is a caveat for prepayment. Student loan servicers are there to collect your bill and may collect extra payments for the next month. While this may advance your due date, it won’t pay off your student loans quickly. Instead, have your servicer apply overpayments to the current balance and keep the next payment within the planned due date.

Make Payments Twice a Month

This is an easy strategy that you can do to push yourself into paying more towards your debt. You can start by paying for half of your payments every two weeks rather than making one lump sum payment every month. In this way, you can make extra payments every year, taking away dollars from interest and time off your repayments.

Enroll Yourself for Autopay

If you’re not a big fan of refinancing your loans, autopay is another option you can look into to lower the interest on your student loan. You may contact your federal student loan servicer to get a quarter-point interest rate discount, provided that you let them make automatic deductions from your bank account. This is also an option that many private lenders offer for students.

Prepare to Make Sacrifices

When looking for solutions on how to pay off student loans quickly, be sure to analyze your lifestyle and see if there are any things that you can do without. Consider eliminating things such as:

  • Cable TV
  • Netflix Subscription
  • Takeout food
  • Movies
  • Expensive gifts

You can also cut the cost of your housing in half by looking for a roommate, so if you have a guest room or extra space in your home, be sure to rent it out. You can also sell things that you no longer need — look through your closet, storage, or garage to see what you can put on eBay. You could also have a garage sale.

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