Back to Within Reach homepage

Personal finance  |  August 28, 2023  |  Connor Peoples

How to pay off student loans (fast!)

What you’ll learn
  • How to get organized
  • Ways to potentially lower your student loan interest rate(s)
  • What bonus payments can do for you
  • How to take advantage of extra money

Whether you’re a current college student, a new grad, or a seasoned professional, creating a plan to pay off your student loans is a smart move. With the right resources, you can get ahead of schedule and pay off your student loans fast!

1. Get organized

If you haven’t started paying off your student loans, or if you’re in the process and could use some help, take a moment to get organized.

First, find out what loans you used. If you have federal student loans, you can visit the Federal Student Aid official website. If you have private student loans, visit your lender’s website and log into your account. If you’re not sure whether your student loans are federal or private, or who your private loans are with, pull your credit report to find out.

After you figure out who you owe, it’s just as important to figure out how much you owe, when your payments are due, and what the interest rate is for each loan. By creating a spreadsheet with your loan amounts, interest rates, and servicers, you can pinpoint the loans with the highest interest rates. The loans with the highest interest rates are the loans you should prioritize to pay down the fastest.

2. Use the right tools

Once you understand what your student loan payments will be, there are tools, like a monthly budget worksheet, that can help you compare your student loan payments to your other monthly expenses. By mapping out your monthly expenses line-by-line, you can decide from there how to manage your spending.

Still in school? Now’s the best time to start planning how to pay back your student loans. You can use a student loan calculator to help you estimate your student loan payments.

Additionally, if you want to set yourself up now for a faster paydown in the future, you can choose to make payments while in school. If you pay interest, or even a small, fixed amount every month while in school, you may be able to lower your total loan cost. This could help you graduate with less debt, build your credit, and make your post-school payments more manageable.

3. Enroll in auto debit

Most federal student loan servicers offer a 0.25 percentage point interest rate discount if you set up automatic payments for your student loan. Many private lenders offer this, too. Enrolling in auto debit will help ensure your student loan payments are paid on time each month.

At Sallie Mae, enrolling in auto debit may qualify you for a 0.25 percentage point interest rate deduction on your eligible loan(s).footnote 1 By lowering your interest rate and making on-time payments each month, you will save money on your total loan cost, which could in result in your paying off your student loans faster.

4. Make bi-weekly student loan payments

Since many people get paid every other week, this repayment strategy lets customers fit their student loan payments into their biweekly budgets.

On a typical monthly repayment schedule, a borrower makes 12 student loan payments per year. By making 26 payments (52 weeks in the year, divided by two) of half the required payment amount, a student could end up making 13 months’ worth of student loan payments over the same 12-month span. In addition, by paying your student loans bi-weekly, you may lower your principal amounts more frequently, which could lead to lower total interest being paid over the life of the loan.

5. Take advantage of “extra” money

Whether it’s from a birthday gift or a year-end bonus, consider using your extra income to make more than the minimum payments on your student loan. This could also help you save money on interest and total loan costs over the life of your loan.

6. See if your employer can help

Now more than ever, many employers are beginning to help employees pay down student loans. This may come in the form of direct payments to lenders or online tools to help employees track loan balances. Some are also matching payments with contributions to an employee’s 401(k). Ask a manager or an HR representative what your employer is offering to help employees pay down their student loans.

Address any problems right away 

If you’re having trouble paying down your student loans, you should speak with your cosigner, if you have one. Your cosigner is equally responsible for paying off the loan, so they should know if you’re having trouble. 

Also, don’t hesitate to contact your loan servicer—they may be able to help.

Related topics

footnote Sallie Mae does not provide, and these materials are not meant to convey financial, tax, or legal advice. We make no claims about the accuracy or adequacy of this information. These materials may not reflect our view or endorsement. Consult your own financial advisor, tax advisor, or attorney about your specific circumstances. Reproduction without explicit permission is prohibited.

footnote External links and third-party references are provided for informational purposes only. Sallie Mae cannot guarantee the accuracy of the information provided by any third parties and assumes no responsibility for any errors or omissions contained therein. Any copyrights, trademarks, and/or service marks used in these materials are the property of their respective owners.

footnote 1. Borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month and may be suspended during periods of forbearance or deferment, if available for the loan.