7 Best Ways To Pay Off Student Loans

If you borrowed money to pay for your tuition, your biggest question might be how to pay off student loans fast. And maybe you're even considering saving vs paying off debt.

The short answer is that there's no magic formula to paying off your student loans the fast way. But luckily, there are definitely things you can do to speed up the process and make it easier to get debt-free.

In this article, you’ll find seven strategies to help you pay off your student loans – and pay them off fast.

How to Pay Off Student Loans Fast

Paying off student loans can be quite challenging. However, with the right strategy and consistent commitment, you can pay off your student loan faster than expected.

The best way to pay off your student loan fast is to save money and pay more than the pre-set minimum amount each month.

While it’s one of the best ways to pay off your loan fast, making larger deposits may not always be an option.

7 Best Ways to Pay Off Student Loans

Let’s discover the seven best ways to pay off student loans.

1. Stick to Your Budget

The very first step to managing your finances and paying off student loans is to create a budget and stick to it.

Take a pen and paper or open an Excel sheet to write down all your monthly expenses. This process can also help you identify the expense categories you can cut to save even more money.

Once you've written all your expenses down, make sure to highlight the important categories and stick to them and avoid making unnecessary purchases or overspending. And when you have a strict monthly budget, you’ll be left with more money to allocate to cover your student loan. Apps like Monorail can help you set budget categories for your finances, including a wishlist for non-necessities, so you always stay on track.

2. Leverage Your Job Advantages

There are some employers and jobs that offer student loan forgiveness if you work in a service capacity.

Here’s the list of jobs that may be eligible for student loan forgiveness, or assistance at least:

• Public servant

• Lawyer

• Doctor

• Nurse

• Federal agency employee

• Volunteer organization worker

• Automotive workers

So make sure to check whether your employer offers student loan assistance or forgiveness as part of their benefits package.

3. Consider Refinancing Your Student Loans

If you have a good credit score and a stable job, it makes sense to consider refinancing your student loans. Refinancing replaces several student loans with a single loan, typically at a lower interest rate.

In addition, to pay off your loan faster, consider choosing a shorter loan term than what’s remaining on your current student loans. While signing up for a shorter-term loan may increase your monthly payment, it will eventually help you pay off your loan faster and even save money on interest.

4. Enroll in Autopay

In case you don’t want to refinance your student loans, autopay is a great way to decrease the interest rate on your student loan. Federal student loan issuers offer a quarter-point interest rate discount when you let them deduct funds from your bank account automatically.

The savings from autopay discounts are typically minimal though. For example, an interest rate on a $10,000 loan may drop from 4.5% to 4.25%. This could save you around $144, but it’s still some extra cash to help pay off your student loan faster. Take every bit you can get!

5. Pay Off Capitalized Interest

Capitalized interest is interest that’s not paid off. This interest adds to your balance and at the end of the day, leads you to pay more on your student loans.

Generally, this interest adds up while you’re still in school, in deferment, or forbearance. However, you can avoid the capitalized interest if you pay at least the new interest while it accrues. Make sure to pay off the interest on your unsubsidized federal student loan in a lump sum at the end of the grace or other deferment period before it adds up to the loan balance.

6. Start a Side Hustle

Probably the best way to pay off your student loan fast is to make extra money. Since getting a raise isn’t always an option, you can increase your income by starting a side hustle.

Some of the best side hustle ideas include:

• Delivery or rideshare driver

• Freelancer

• Babysitter, pet sitter, or elderly caregiver

• Tutoring – e.g. teaching children English online

You could even sell your used stuff or start a small business and resell stuff online or locally.

7. Make Extra Payments Whenever You Can

Last but not least, incorporating some of these strategies in real life, such as, having a budget, or starting a side hustle, can help you pile up more money. Whenever you have extra money at hand, consider making extra payments to cover your student loan instead of spending that money on something less important.

Ready to Pay Off Your Student Loan?

Simply knowing these seven strategies to pay off your student loan won’t get you far. It’s important to decide which of these loan payoff strategies make sense for you, put a plan in place, and most importantly, stay consistent with them.

Remember, paying off student loans is still a challenging process and it may even require you to make some short-term sacrifices. But imagine going debt-free – wouldn’t it be one of the best feelings?

With an app like Monorail, you can put your repayment strategy into place.

See how Monorail can help you save money and help you spend a little less, too.

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