How To Accelerate Student Loan Repayment

updated on 05 February 2024

Paying off student loans quickly can be a liberating experience, providing financial freedom sooner than expected. You want to buy a house, get married, or start investing your money ASAP so you can stop working your corporate job. We all do!

In this guide, we'll explore why you should pay off your student loans fast, effective strategies, actionable tips and also look at if there's any downsides to paying off your student loans early.

Why You Should Pay Off Your Student Loans Fast

Paying off your student loans ahead of schedule isn't just a financial accomplishment; it comes with a myriad of compelling reasons that can significantly impact your financial well-being.

Let's explore why accelerating your student loan repayment is a strategic and empowering decision:

1. Interest Savings:

Say it with freedom. Paying off your student loans fast minimizes the time for interest to accrue, resulting in substantial long-term savings.

Every extra payment you make goes directly toward reducing the principal amount, diminishing the overall interest you'll pay.

If you want to see how much faster you could pay off your student loan by making an extra monthly contribution, plug your numbers into our free student loan repayment calculator and see how much you could save.

2. Early Debt-Free Status:

Achieving a debt-free status sooner provides peace of mind and alleviates the burden of student loan obligations.

A clean slate opens the door to financial freedom, allowing you to allocate your funds toward other life goals.

3. Enhanced Financial Flexibility:

With student loans off your financial checklist, you gain greater flexibility in allocating income to other priorities.

Extra funds can be redirected towards investments, savings, or entrepreneurial pursuits. Without student loan debt, the possibilities are endless.

Ever consider building your own website or starting your own blog? you can!

4. Reduced Stress and Anxiety:

Escaping the clutches of student loan debt provides emotional relief, reducing stress and anxiety associated with financial obligations.

A debt-free existence fosters a higher quality of life, allowing you to focus on personal and professional pursuits. Think about all of those times you said no to going out with friends or grabbing a dinner. Now you have more money to afford those nights without having to stress about your student debt payments.

5. Faster Progress Toward Financial Goals:

Paying off student debt paves the way for faster progress toward other financial goals, such as homeownership, travel, or starting a family.

Something you thought might never be possible is now there for the taking because you were disciplined and paid off your student debt.

Can You Pay Off Student Loans Fast?

Yes, of course you can pay off student loans fast. Take my story as an example. Over the past 3 years I've paid over $40,000 towards my student loan debt.

A big help has been working for a company that provides student loan repayment. On top of my regular monthly payments, my company has contributed over $10,000 to my student debt.

The feasibility of paying off your student loans depends on various factors, such as your financial situation, loan terms, and personal commitment. Let's dive into the strategies that can help you achieve this goal.

Fast Student Loan Repayment Strategies

Here are some student loan repayment strategies that can help you get on the path to financial freedom:

1. Create a Budget Battle Plan

Create a Budget Plan
Create a Budget Plan

Outline your income, expenses, and debt obligations. Identify areas where you can cut back and allocate more funds to loan repayment. Track Your progress and regularly monitor your repayment progress.

If you're stuck, consider starting with the zero-based budgeting method or use our free budget template.

2. Leverage Windfalls Wisely


Use tax refunds, work bonuses, or unexpected windfalls to make lump-sum payments.

Direct these funds towards the principal to reduce overall interest.

3. Consider Loan Refinancing

Student Loan Refinancing
Student Loan Refinancing

Explore refinancing options to secure a lower interest rate. Be cautious and assess the difference between private student loans vs. federal student loans.

4. Embrace Side Hustles

Side Hustles for Student Loan Repayment
Side Hustles for Student Loan Repayment

Channel your inner entrepreneur and explore side gigs for additional income.

Allocate the extra earnings directly to your student loan payments.

5. Implement the Snowball or Avalanche Method

Snowball Method vs. Avalanche Method
Snowball Method vs. Avalanche Method

Prioritize repayment by focusing on the smallest balance (Snowball Method) or highest interest rate (Avalanche Method) loan first.

Gain momentum as you clear individual loans. This will help create a sense of accomplishment and put you in a positive mindset to keep going.

Speeding Up Student Loan Payoff

While the traditional repayment schedule may seem like a never-ending road, there are strategies and approaches that can accelerate your progress and bring the destination of debt-free living into clearer view.

Here's 3 ways you can speed up your student loan payoff journey.

1. Automate Payments

Set up automatic payments to avoid late fees and ensure consistent progress.

Some lenders offer interest rate reductions for automated payments.

2. Biweekly Payments

Implementing biweekly payments is a tactical and proven approach to expedite your student loan payoff. Instead of the standard monthly payment, biweekly payments involve making half of your monthly payment every two weeks.

Over the course of a year, this results in 26 half-payments, which is equivalent to 13 full payments — one extra payment per year.

The benefits of this strategy are twofold: You reduce the overall interest paid over the life of the loan, and you accelerate the repayment timeline. This strategy could potentially wipe out several years of interest payments.

3. Apply Work Raises to Loan Payments

Allocate salary increases directly to student loan payments. Resist the temptation to increase your lifestyle with newfound income.

Think about it. Let's say you make an additional $500 per month with your raise. If you allocate this money to your student loan, on top of your regular minimum monthly payment, then you shave off a massive amount of time for your repayment and the total amount of interest repaid.

Other Ways To Pay Off Your Student Loan Faster

1. Utilize Employer Student Loan Repayment Assistance

Check if your employer offers student loan repayment benefits.

Leverage employer contributions to expedite your payoff journey. As mentioned earlier, the other company I'm working for has paid over $10,000 to my student loan debt since I started working there.

Other companies like NVIDIA offer employer student loan repayment. They pay up to $350 a month to help repay your student loans - up to a lifetime maximum of $30,000!

2. Participate in the Gig Economy

Explore gig economy opportunities to generate additional income.

Direct these funds exclusively towards student loan repayment.

3. Cut Unnecessary Expenses

Conduct a thorough review of your budget and identify areas where you can cut unnecessary expenses.

Redirect the savings towards your student loan payments. Small sacrifices in discretionary spending can accumulate to make a substantial impact on your repayment speed.

I remember when I did this, I was able to negotiate my phone and internet bills down by about $50. I also realized I was subscribed to way too many streaming services, for example FUBO which was about $100 a month!

This may seem like a small amount but an extra $150 contribution to your loan each month will still speed up your repayment timeline.

Is There a Downside to Paying Off Student Loans Early?

Paying off student loans ahead of schedule is undoubtedly a commendable financial goal, but it's crucial to weigh the pros and cons.

Let's take a look at the potential downsides:

1. Emergency Fund Depletion:

Directing a substantial portion of your income toward loan repayment may deplete your emergency fund.

A robust emergency fund is your financial safety net. Ensure it's sufficient to cover three to six months' worth of living expenses before aggressively paying down student debt.

In early 2020 I was laid off but thankfully had a larger emergency fund at the time (about $10,000). This allowed me to conduct my job search with less stress. Without it, I know for a fact this would have been much more difficult.

2. High-Interest Debt Prioritization:

If you have other debts with higher interest rates, prioritizing student loans may not be the most cost-effective approach.

Evaluate all outstanding debts and focus on those with the highest interest rates first. This strategy can save you more money in the long run.

3. Opportunity Cost:

Aggressively repaying low-interest student loans might mean missing out on potentially higher investment returns.

Compare the interest rate on your student loans with potential returns from investments. If the loan interest is low, investing surplus funds may be a more lucrative option.

4. Forgoing Potential Loan Forgiveness:

Certain professions or employers may offer loan forgiveness programs, but these often come with specific eligibility criteria.

Research whether your profession qualifies for loan forgiveness. If eligible, strategically plan your repayment to maximize potential forgiveness benefits.

5. Impact on Other Financial Goals:

Aggressively repaying student loans may impact your ability to save for other important financial goals, such as homeownership or retirement.

Try striking a balance between debt repayment and saving for future goals. Create a comprehensive financial plan that aligns with your priorities.

I know for me, I could have been student debt free much sooner but I also wanted to save for a wedding, have a down payment for a house and not miss out building up my retirement accounts.

Everyone's situation is different so be sure to think about this when crafting your financial plan.

6. Psychological Toll:

The psychological toll of aggressive repayment may lead to burnout or financial fatigue.

Be mindful of your mental and emotional well-being. It's crucial to strike a balance that aligns with your financial goals while maintaining a healthy mindset.

Final Thoughts On Paying Off Student Loans Fast

Accelerating student loan repayment requires commitment, strategic planning, and perhaps a dash of humor. Remember, the journey may have its challenges, but the financial freedom awaiting you on the other side makes it all worthwhile.

I, like many others have been repaying my student loans for over 10 years. What's really helped me over the past couple years is putting more than the minimum payment every month, and working for another company that provides a generous student loan repayment benefit.

I hope this article helped you come up with ideas on how to repay your student debt fast. You got this!

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