If you’re one of the 70% of students who take out loans, you know that the name of the game is to pay them off as soon as possible. The longer you have a loan, the more you’ll end up paying in interest—which is why you're here, figuring out how to pay off student loans fast.
While some repayment strategies may sound trivial, they can save you thousands of dollars when all is said and done. Below, Ian Group, a lawyer and money coach, answers common student loan questions and doles out his best advice for becoming debt-free ASAP.
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How long does it take to pay off student loans?
The length of your loan will depend on several factors—including where you got the loan from (say, the federal government or a private source) and the payment terms you agreed to. That said, there is some degree of standardization across the board.
How long does it realistically take to pay off student loans? According to Group, the standard repayment plan for federal loans is typically 120 months, or 10 years, but that can also be shorter or longer.
“The biggest factor in determining the length of time it will take you to pay off student loans is how well you can stick to the payment plan,” he says. “If you pay more than the minimum, you can accelerate payoff, but if you pay less, you delay your payoff—not to mention, you can pick up additional interest, penalties, and fees along the way.”
7 tips on how to pay off your student loans quicker
So, how to pay off student loans quickly? The best way is to familiarize yourself with all the options and strategies, and figure out the combination that works for you. Depending on the source of your loan, your current financial situation, and your plans for the future, you may find that certain tactics work better for you than others.
1. Pay more than the monthly minimum
When your loan repayment plan begins, you’ll be given a monthly minimum that you’re required to pay. (For reference, as of 2023 the average monthly student loan payment was about $503.) If you make a partial payment, you’ll likely incur late fees and potentially other penalties, depending on your loan terms.
On the flip side, paying more than the minimum each month is far and away the most common and effective method to shorten your repayment plan, Group says. By using a student loan calculator or simulator like this one, you can figure out how much interest you’ll save if you increase your monthly payment. Even an extra $20 or $50 per month will save you hundreds or even thousands in overall interest. In other words, you want to pay it forward (literally).
2. Refinance your debt
Another strategy is to refinance your loan(s), which helped Group pay off $230,000 in student loan debt.
“Refinancing your debt can help you pay it off faster, if you have multiple loans,” he says. “If you can lower the interest rate, your monthly payments go further towards paying off your debt. However, it’s important to note that this isn’t necessarily going to work out in your favor—you have to be careful. If you lower the rate but extend the payment period, you could wind up with more interest paid overtime. Always run the numbers and read the fine print to make sure what you’re doing is in your best interest.”
3. Take on a side gig or another job to increase your payment
For those with a low income, the idea of paying off a large student loan can be daunting. We can’t make debt magically disappear, but finding a way to make more money can make it manageable.
“Assuming that you’re able to afford your expenses with your current workload, taking on extra work or a side hustle can help you pay debt faster,” Group says. “Ideally, you could funnel that money directly to your debt. Some employers offer student loan benefits too, which can help you pay it down.”
4. Seek out federal student aid loan forgiveness
The government has various debt relief programs that may or may not be available to you, depending on your type of loan and their eligibility criteria. Many students who take out loans won’t be eligible for these programs, but hey, you never know.
Another option is loan forgiveness—like the Public Service Loan Forgiveness program, which forgives the remaining balance of your loan after 120 qualifying monthly payments if you work full-time for an eligible employer.
Also, if you are a teacher, government employee, a nurse, doctor, or medical professional, or you have a disability, or you work for a non-profit, you may qualify for other forms of loan forgiveness. Again, these programs are not designed to help everyone, but it’s worth checking to see if you qualify.
5. Pursue a higher-paying (or forgiveness-eligible) career path
“Your career choice could impact how quickly you become debt-free,” Group says. When considering your career path, you can refer to sites like the U.S. Bureau of Labor and Glassdoor to see what the average salaries are for certain positions and industries. Also, as mentioned, some jobs are more likely to be eligible for loan forgiveness, so before applying to jobs, you can check if the employer is eligible here.
6. Utilize auto-pay
One strategy to ensure you’re paying on time and in full is to set up auto-pay with your loan payments. Late payments can result in fees and/or penalties, and if you have multiple loans you’re trying to balance, auto-pay can make it easiest.
“Auto-pay requires you to be diligent with your money and ensure that you have cash in your checking account to cover your payments, but it can help you prioritize payments,” Group says. “It substantially eases the burden of having to manage multiple payments and due dates.”
7. Pay off any other high-interest debt
Ideally you want to eliminate all the obstacles in your way as you pursue a student debt-free life…including other forms of debt. Those who have accumulated other debt, especially credit card debt, will have a harder time finding the money to put towards their student debt, says Group.
“Before you get aggressive with your student loan debt, you should absolutely look at whether you have other high-interest debt, like credit cards,” Group says. “Debt with higher interest rates can have a very significant impact on your financial future, so getting this under control before you pay your student loans might be the path you have to take.”
The interest rate on federal student loans can range from 5.50 to 8.05%, or more, while the average credit card interest rate is 24.62%, as of June 2024. It’s easy to see how a credit card balance can far outpace your student loan interest, even if the principal amount is higher on the latter. Most financial experts recommend the debt avalanche or snowball method, which prioritize either paying your highest interest debt or your smallest debt balance, respectively.
Bottom line
Above all, the best methods for paying off your student loan debt will depend on your current financial situation and your goals for the future. As someone who is now totally student debt-free, Group will be the first to tell you that it’s all about balance.
“It's very important for people to think about their goals and priorities in life,” he says. “And I think part of being well-rounded financially is saving money for your future. If you have an extra $500 per month, for instance, consider whether it’s best put towards your student loan debt or in an investing account. Maybe you split it. Run the numbers and see what makes sense.”