5 Ways to Pay Off Your Student Debt Faster

By Nick Wharton on 1 September 2016 1 comment

Plenty of us face student debt payments every month. In fact, in the United States an estimated 40 million people have student loan debt. With the rising cost of education, loans are becoming an increasingly common way for people to pay for school.

While compounding debt may feel overwhelming, paying off your student debt isn't impossible — and you may be able to pay it off faster than you think. There are a few advantages that come along with paying off your debt faster. The sooner you reduce those balances, the sooner you'll stop paying interest on them. And once your debts are all paid off, you can feel good about putting that money toward something else.

Here are some easy steps you can take that will help you pay off your student debt faster, saving you money in the long run.

Refinance and Consolidate Your Loans

If you've never refinanced your student loans, consider that it may be a good way to save a lot of money and help you to pay off loans faster. With online lenders like CommonBond, you can save thousands through lower APRs.

You may also want to consolidate multiple loans so that you're making a single monthly payment. This will simplify your payment process, and you'll further benefit from a lower APR when it applies to all of your loans — not just one of them.

Pay Off Your Student Debt With a Credit Card

You can actually put your monthly loan payment on a credit card and earn rewards for cash or travel. But don't do this if you can't pay off your balance in full each month. You'll end up paying more in interest than any amount of rewards you could earn. (See also: Best Credit Cards for College Students)

Make an Extra Principal Payment

This is an extra payment that you can make on a schedule that you determine — every two weeks, for instance. If you're making extra payments, it will reduce the time it takes to pay off your loan in full.

Set a Goal and Stick to It

It's really important to figure out a budget that makes sense given your personal situation. You'll need to take into account monthly expenses, like rent, food, a car payment, etc.

From there, consider how much money you can put toward paying off your student debt. Remember that the more money you pay toward your loan, the faster you'll be able to pay it off. So you should also consider how much time you'd like to take to pay off your loan. Then you can factor in the money you'll save in the long run by paying off your debt sooner rather than later.

Get a Second Job or Side Hustle

If your budget falls a bit short on cash, you can always look into getting a second job and put those funds toward paying off your student debt. The more time you spend working, the less free time you'll have to spend your money, anyhow. And the effort and discipline you expend on acquiring or perfecting a second income stream will serve your career path and finances well in the future.

How are you paying off your student loans?

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Guest's picture
Christie

We actually did what they don't recommend; we borrowed it from our retirement account. But, in the long run, it was WORTH it!! We did it the summer of 2001, just before 9/11 happened, (& our portfolio lost a good percentage of its worth anyway), we paid ourselves back in 2 years with interest, which went directly into our retirement account. Not a conventional way to have it work, but taking care of it and saving over 6K in interest was totally worth it. Again, not recommended, but you have to see if it will work for you.