Delaying the payment of your student loan is tempting due to lengthy repayment periods, which can be more than 20, 25, or even 30 years, depending on the plan. But, if you wish to avoid spending many decades repaying your loans, there are actions you can take immediately to accelerate the repayment process.

1. Pay While You’re in School
If you’re a student at the moment, even making small payments towards your loans will be beneficial for your future. If you can manage to pay off some of your loans while still in school, it will reduce the amount you owe when you finish your studies. You also have the option to make payments during the six months after you graduate before your repayment officially begins. The more you pay before your loan interest is added, the less extra money you’ll have to pay on top of your initial loan amount after you’re done with school.
2. Pay More Than the Minimum
Your repayment plan depends on how much you borrowed. It sets a smallest amount you must pay every month to clear the debt during the repayment period. Paying this minimum keeps you following the plan, yet you’re free to pay more than needed each month. Even adding a bit more money on top of the minimum can lead to progress. You might start cutting down the repayment time by several months.
3. Make an Extra Payment
If you receive a work bonus or a substantial tax refund, you have the opportunity to use that extra money to reduce your student loan debt all at once. By directing this lump sum towards the main amount you borrowed (principal), you’re aiming to decrease the total amount you still owe.
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4. Activate Autopay
The idea of “set it and forget it” is quite appealing. Certain student loan lenders, even federal ones, provide discounts for using autopay. This means that by consistently sticking to your repayment schedule, you could decrease the total interest you’ll end up paying throughout the duration of your student loans.
5. Stick to the Standard Repayment Plan, If You Can
Once you finish school, you’re automatically put into the Standard Repayment Plan. This plan is designed to assist you in repaying your loans within 10 years. It’s the quickest option, and it results in the lowest interest payments during the repayment period.
In contrast, there are income-driven repayment (IDR) plans. These plans have extended repayment periods, either 20 or 25 years, depending on the specific plan you choose.
6. Tap into Employee Benefits
Certain jobs and companies provide a helpful perk called matching student loan repayment benefits. This means they will contribute an amount that matches your monthly payments, up to a specific limit. Until 2025, companies can give their employees tax-free student loan repayment benefits, with a maximum of $5,250 per year.
Keep in mind that not all companies have this kind of benefit, but it’s worth inquiring with your employer to see if they offer such special advantages. Taking advantage of this benefit could significantly speed up the process of paying off your loans.
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7. Find a Secondary Source of Income
If you’re having difficulty finding extra money to allocate towards reducing your student loans, think about transforming a hobby into a way to earn more or using your spare time to participate in the gig economy. You might choose to do tasks like grocery delivery, dog walking, or selling handmade items online. If your main earnings are primarily used for your regular expenses, you can utilize the money you earn from your secondary source of income to gradually reduce your student loan debt.
8. Revise Your Budget
If your budget only includes the minimum monthly payment, it’s likely that you’ll need more time to clear your debt. If possible, adjust your budget to prioritize quicker repayment of your student loans. This might involve allocating less money for activities like eating out, traveling, or shopping. By doing this, you’ll free up those funds to use for paying off your student loans more efficiently.
9. Check Tax Deductions
The student loan interest deduction allows borrowers to request up to $2,500 in deductions for the interest they paid on student loans during the past year. This amount varies according to their modified adjusted gross income (MAGI). It’s not necessary to list individual deductions to take advantage of this, and it applies to both federal and private student loans. The deduction you receive from taxes can be used to make additional progress in paying off your student debt. Additionally, there could be other deductions and credits you might be qualified for.
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10. Look into Refinancing
If you have private student loans or a combination of federal and private loans, you might want to consider the option of refinancing your student loans. Refinancing involves obtaining a new, private loan to pay off your existing loans. Afterward, you’ll make a single payment towards your new, refinanced loan. It’s important to ensure that the new loan offers a lower interest rate compared to your current one, and you should structure your repayment plan based on what you can comfortably afford.
Various companies specialize in student loan refinancing, each offering distinct advantages and interest rates. However, it’s crucial to note that when you choose to refinance, you forfeit all federal benefits and protections tied to your original loans. This includes eligibility for programs like Public Service Loan Forgiveness (PSLF) as well as options for deferment and forbearance.
Only opt for refinancing if you have no intention of relying on federal benefits for your loan repayment strategy.
What Is the Smartest Way To Pay Student Loans?
One effective and efficient method to clear your student loans, which is also quite speedy, is by paying more than the required minimum each month. By lowering the main amount you owe (principal balance), you’ll also decrease the total interest you’ll have to pay throughout the loan’s duration.
How Long Do Most People Take To Pay Off Student Loans?
Although the Standard Repayment Plan is designed for a 10-year repayment period, a study by One Wisconsin Institute in 2013 discovered that individuals who participated in the survey actually took an average of 21 years to fully pay off their student loans.
Is There a Downside To Paying Off Student Loans Early?
There’s a potential drawback to repaying your student loans ahead of schedule. If you choose to pay off your loans quickly, it’s possible that any future loans you acquire might have higher interest rates compared to what is typically offered. Lenders take this approach to balance the possibility that you could repay the new loans faster than anticipated, which would reduce the interest income they earn over time. As a result, they may require you to pay more interest upfront to counter this risk.
The Bottom Line
Repaying your student loans could seem daunting, but there are several methods to expedite the process. Establish specific goals, adjust your budget, and make use of benefits from your employer and tax breaks related to education.
By concentrating on settling your student loans promptly, you increase the funds available for your personal use in the future.
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