How To Pay Off Student Loans Fast

These days, college loans can be an incredible burden on graduates. In fact, if you're not careful your college loans can follow you for the rest of your life and be garnished from your Social Security checks. Being chained to student loans can prevent you from being able to make sound investments to get ahead in life. Carrying a huge debt can cast a pall over every aspect of your life.

According to the Federal Reserve Bank, most graduates owe a little over $24,000 upon graduation. Approximately 10% of graduates owe nearly $60,000. How can a young person just starting out in life pay this debt down quickly and get on with life?

In this article, we offer 30 solid tips on how to pay off student loans faster and discuss some sound advice that will help you do just that.

​30 Tips For Paying Off Student Loans

1. Set Realistic Goals

Establish a timeline (e.g. 3 to 5 years) for paying off your student loans. Divide the amount you owe by the number of months in your plan and make that your regular monthly payment.

​2. Learn to plan ahead

When you create your 3 to 5 year plan for paying off your student loans, also consider your long-term financial goals.

Establish plans for where you want to be in 10 years, 15 years and so on.

Review your plans often to help yourself stay on track.

3. Work while you study

Maintaining part-time work while you're studying will help you save up in advance for repaying your college loans.

4. Start paying early!

You don't have to wait until you graduate to begin paying off your student loans. The sooner you get started, the sooner you will get done.

When you begin making payments early, you can significantly reduce the overall amount of interest you will pay throughout the life of the loan.

5. Pay more!

While this may seem quite obvious, many people don't fully understand that when you pay more on your student loans it's the same as paying more on a mortgage.

Making larger payments helps you pay off the principal more quickly and reduces the amount of interest you pay. This can mean a significant difference in the overall amount paid.

6. Don't co-mingle funds

Set up a separate account (well in advance) to keep your money for paying your student loan debt. Tie this account to stocks, annuities, mutual funds and/or a savings account offering dividend reinvestment plans.

Make regular deposits to this account, and do not touch this money until you need it to pay back your college loans. Interest will grow, and you will have more to work with.

7. Use windfalls wisely

If you win the lottery, inherit some money or get a nice tax refund, remember to apply a good percentage of it to your student loans.

It's very tempting to use this "found" money just for fun; however, you'll get far more value from it by applying it to your student loans.

8. Make good use of rises in income

Just like "found" money, getting a raise can cause you to want to celebrate and buy lots of nice stuff. Think twice before doing this!

You can use that money to pay off your student loans. Of course, you could also use it to improve your quality of life.

Compromise by applying 50% of your raise to your student loans and 50% to investments and things you need.

9. Practice austerity

You may feel as if you're already cutting corners and doing without; however, smart money management and wise planning can save you a great deal of money. Sit down and take an honest look at your budget and review your expenses.

Reduce or cut back on unnecessary items such as eating in restaurants frequently, subscribing to cable TV and drinking alcohol.

Instead, learn to budget and cook, borrow DVDs and other media from the library or download it free and drink filtered tap water!

You'll be healthier, wealthier and wiser and you will pay off your student loans faster.

10. Create a smart strategy for paying off your student loans

Naturally, you must make at least the minimum payment on all of your loans every single month; however, be sure to focus the most on the loans that carry the highest interest rates. Pay these off first to save the most money.

11. "Snowball" your loans

Once you've paid off your loan with the highest interest, add the money that you’ve been using to make that payment to the loan with the next highest payment. This will enable you to pay that loan off that much faster. Before you know it, you'll have all your student loans paid down.

12. Refinance and/or consolidate

Refinancing can help you to secure a lower rate of interest. If you have more than one student loan, consolidating your student loans can streamline the repayment process so that you are making one monthly payment rather than multiple payments.

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13. Choose "forgiving" employment

There are some jobs that will help you pay off your student loans by offering "forgiveness". Some examples include teaching, nursing, enlisting in the military, working for the government or doing public service work.

Be advised that taking this type of job is a commitment. You must meet specific requirements, and you must stay for the full term of your obligation.

Loan forgiveness programs may result in a reduction of your payments; however, this means that your interest will rise. If you bail out, you will be stuck with high interest.

14. Volunteer your time and skills

Programs such as the Peace Corps and AmeriCorps provide partial loan cancellation programs and education awards. Additionally, while your volunteering with these programs, your living expenses are provided.

15. Check with lenders to see how you can reduce your costs

There may be certain circumstances or steps you can take that will reduce your interest and lessen your burden. For example, many services will lower your interest if you enroll in an automatic payment program.

16. Be sure to take all of the deductions that are coming to you on your taxes.

When you are paying off student loans, you are sure to be eligible for a significant deduction. This may be as much is $2500 off your taxes which you can claim even if you do not itemize deductions.

17. Avoid extending the period of your loan.

Programs such as Pay As You Earn (PAY E) may seem like a good idea because they decrease your payment amount. Remember that this always increases the length of your loan and the amount of interest you pay.

It's better to simply bite the bullet, pay as much as you possibly can and get it over with.

18. Increase the frequency and amount of your payments

Instead of making your student loan payment once a month, pay every two weeks. You don't have to pay the total amount every two weeks, instead divide the amount by two and pay half biweekly.

When you do this, you will end up making a complete extra payment once a year. This can really help to reduce the length of your loan. If you round the amount you pay each time up to the next ten-dollars, you will get ahead even more.

So, if your exact biweekly payment would be $256 (for example) round it up to $260. Paying those few extra dollars a bit more often can make a big difference in the long haul.

19. Read the fine print

Be sure to read any and all agreements that come with the loans you take out. If you don't understand the terminology or the terms of the loan, be sure to ask a trusted advisor to help you.

Don't sign your name on the dotted line until you are completely satisfied that you comprehend what you are signing.

20. Ask about Income-based Repayment (IBR) of federal loans

When you take out a federal loan, you may be eligible for IBR. This means that the amount of your payment will be determined by calculating 15% of your total discretionary income. Additionally, if you make your IBR payments faithfully for a quarter of a century and meet all other requirements, the remainder of your balance may be canceled!

21. Avoid Forbearance and/or Deferment!

If you are experiencing true hardship and need to take a break from making payments on your student loans, you may be eligible for forbearance or deferment; however, you should avoid these options.

In both, it is possible for the interest on your loans to continue growing even as you are not paying. In the long run, you'll end up paying much more.

One of the things that can result is that your wages become garnished. See Student Loan Wage Garnishment for more information.​

22. Make good use of available tools

There are many good, free financial tools and apps available online. One example is the repayment calculator you can find at FinAid.org. This tool can help you determine how much you will need to pay monthly so that you can meet your 3 to 5 year payoff goals.

23. Heed good advice

If you take out a federal student loan, you must attend exit counseling in person or online. It is very important that you pay close attention during exit counseling and take note. This counseling is intended to inform you of your rights and also to provide smart information about repaying your loan.

24. Always keep some cash on hand

You can be more sure of being able to make your student loan payments in a timely manner while avoiding drama if you establish an emergency fund.

Open a small passbook savings account and begin making regular deposits to build up an emergency fund of at least $1000 so that you will not have to divert money from your regular monthly bills and student loan payments when the unexpected inevitably occurs.

25. Get a part-time gig

Monetizing your hobby by selling your handiwork or offering your skills and services for a fee is one way to raise extra money to help pay off your student loans. You might also simply take on a part-time job and designate all income from that job to paying off your student debt.

26. Save money and the environment!

Decide whether or not you really need a car, and if you do, use it as little as possible. Always keep alternatives in mind such as walking, biking, carpooling and using public transportation. Smart decisions about transport will improve your health, benefit the environment and leave you with you more money to help pay off your student loans.

27. Be a smart shopper

Look for programs and websites that offer points, rewards and benefits that will help you save money. Instead of making impulse purchases when you buy groceries and other necessities, be sure to plan ahead, clip coupons and make mindful, conscious choices to get the greatest value for your dollar. It may not seem obvious, but these pennies add up and help you meet your obligations more quickly.

28. Hit up your friends and family members!

When people ask you what you want for Christmas or your birthday, tell them that you'd like to have some help paying your student loans. Most people will be happy to help you with this and will probably be more generous than they would otherwise.

29. Don't fall for misleading terminology

Many people misunderstand the seriousness of high student loan debt because they think of it as "good debt". There is no good debt.

While your student loan debt should eventually prove to be an excellent investment, it is still a debt and must be tackled seriously to be gotten rid of.

30. Always think about the end goal

Take some time every day (or at least every few days) to review the financial and lifelong goals you have made for yourself. Visualizing how your life will be once you have your student loans paid off can help keep you motivated and focused.

With Patience, Persistence & Hard Work You Can Move On With Your Life

When you pay off your student loans early, you can save yourself thousands of dollars in interest and you can get on with the business of building a successful and satisfying life more quickly.

As long as you are tied to paying off your student loans, the decisions you make about your life will be colored by your debt. This includes decisions such as your job choices, where you live, how you live and whether or not you ever have any time off or enjoy the fruits of the investment you have made in your education.

The key to getting your loans paid off as quickly as possible lies in good planning and sound, methodical execution of your plans. Make good use of the 30 sound tips presented here to pay off your student loan debts fast and gain control of your life.