How to Pay Down Student Loans Fast

Student loans unlock opportunities for new skills, careers, and earning potential. But student loans can also become an obstacle as they weigh down your budget and prevent you from obtaining financing for other things you'll need, like a home mortgage. Here's how to eliminate this debt as quickly and efficiently as possible.

Key Takeaways

For young people in the United States, the opportunity to obtain student loans can be invaluable. Student loans enable students to transform career goals into reality and make it possible to achieve an education that increases lifelong earning power.

However, student loans also have the potential to create financial roadblocks, which is why it’s so important to make repayment a priority. 

To avoid these obstacles, you’ll need obtainable ways to help you pay down student loans fast. Use the following tips to help get you out of debt and on the path to financial freedom. 

5 Methods to Pay Down Student Loans Fast

Unfortunately, there is no magic trick to paying down your student loans. It is a process that takes planning and dedication. However, some approaches work more quickly than others. 

By following these five simple steps, you can find yourself on the fast track to paying off your student debt and moving on to whatever chapters come next:

1. Set up automatic payments

Autopay isn’t only beneficial for ensuring that your student loans are paid on time and without lapse. This approach to paying down your student loans is also encouraged by many lenders, and could even lead to discounts and lower interest rates in the long run. 

Setting up autopay is the first step to taking your student loans seriously. Keep in mind that paying the minimum payment each month won’t speed up the process. To pay your student loans off quickly, you’ll need to make some extra effort.

2. Start paying as soon as you can

If it’s financially feasible for you, consider the possibility of making payments on your student loans as early as possible. While most college students wait until after graduation to begin paying off their loans, you could stay ahead of the game by paying while still in school.

At the very least, covering the interest you accrue each month can help lower your debt and make student loans easier to pay in the future. 

3. Take advantage of your tax refund

Instead of using your tax refund to splurge on new electronics or take a fancy vacation, consider funneling this money toward your future. 

One of the best decisions you can make with your tax money is to invest it into your student loan debt. Doing so will provide you with the opportunity of making a huge payment into your account, helping you get ahead and on the right track to paying down student loans fast. 

4. Pay as much as you can

Sticking with the minimum monthly payment is the most common mistake borrowers make. Minimum payments mean MAXIMUM interest charges over time, and you’ll be paying off your loans for decades.

Instead, try paying a little more on your monthly bills. You should continue making higher monthly payments (if you can), even if you’ve satisfied future payments. This will keep you ahead of the game and on the right track to getting out of debt. 

5. Look into loan forgiveness options

Believe it or not, you might not have to pay all of your loans back. There are a number of different scenarios where you might qualify for loan forgiveness and reduction.There are, of course, certain requirements to gain loan forgiveness approval. 

However, it’s definitely something worth looking into. When it comes to federal loans, many forgiveness options exist for teachers, public servants, veterans, and more. 

Can people with student loan debt still build credit?

The good news is that you can still build a great credit score, even with outstanding student loan debt.

StellarFi positively influences each of the major factors that determine your credit score, and we report these factors to TransUnion®, Experian®, and Equifax®.

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StellarFi (StellarFinance, Inc.) and its affiliates do not provide financial, tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own financial, tax, legal, and accounting advisors before engaging in any transaction. StellarFi receives a referral fee from the partners mentioned in this article.