7 Ways To Pay Off Your Student Loans Quickly

student loans

I am an advocate of paying off your student loans quickly. With the average graduates student loan bill coming in around $24,000 many feel overwhelmed with the standard 10 year repayment plan. This post is designed to show you ways how you can make a big dent in your student loan balance and get rid of the debt quickly.

Pick Up Additional Income

This can come in various forms. You can work overtime at your current employer, pick up a second job, or start your own side business to increase your income. Whatever you earn, you should be using all of it to pay down your student loan debt. I worked a full time job including overtime along with a part time job for a year after I graduated. I was able to pay off a healthy portion of my loans using this strategy.

Continue to Live Like You Are In College

Just because you have a job making a decent salary doesn’t mean you have to spend it all. Likewise, just because friends ask you to dinner or to go clubbing doesn’t mean you have to say yes. You can decline. Even better, offer alternative things to do. I remember my friends asking me to go out and I didn’t want to spend the money. At first I kept turning them down. Then I thought of a way to hang out with them for cheap: hosting game night at my house. I make everyone dinner and then we watch a movie or play board games. It was such a big hit, we rotate hosting duties now.

Sell Stuff

Not only your stuff, but other people’s stuff as well. Scope out yard, garage, and estate sales for items and turn around and sell them on eBay or Craigslist. But don’t just randomly buy things. Spend some time on eBay learning what sells and what doesn’t. To make it less time consuming, pick items that you know about too. That way you know what you are looking for when at the sales. The eBay app for your smartphone is also a good tool too when you are at the sale. When I was in college, my roommate and I used this strategy. I helped cover most of our living expenses and helped us have a little extra at month end.

Review Your Loan Agreement

Let’s be honest, most of us didn’t read what they were signing when it comes to student loans. If you are lucky, you may have some hidden perks in the agreement. Some student loans will shave off a quarter to a half of a percent of interest if you make a certain number of payments on time or if you sign up for direct debit. Lowering your interest rate will help you pay off your loans more quickly as more of your monthly payment will be going to the principal.

Use Windfalls as Payments

Any extra birthday or Christmas money can be put towards your student loans. Also, any tax refunds and bonuses from your job can go towards paying off the debt too.

Get Your Employer to Pay

If you are working for a private employer, this might be tough to do. But many government jobs will pay off $10,000 per year of your student loans up to a total of $60,000. Also, you can look into volunteer opportunities that will pay off a portion of your loans as well.

Negotiate Your Salary

If you are still looking for a job, be sure to negotiate for a higher starting salary. It may seem odd in the current economic climate, but it is doable and well worth it. Don’t accept a potential employer’s first offer. Come back with a counter-offer that is still reasonable.

If you already do have a job, then work hard and approach your employer six months before you are set for your review and talk about a raise. Doing it beforehand will increase your chances of getting more.

If you combine some of these tips, you will be amazed at how much you will be able to pay off your student loan debt and how quickly too.

This post was written by Don, a staff writer from MoneySmartGuides.

19 Responses to 7 Ways To Pay Off Your Student Loans Quickly

  1. These are all really good tips to pay off student loan debt early. I especially like the idea continuing to live like a college student. It is possible to save money you just have to try!

  2. I really appreciate these tips. I did not even consider reviewing my loan agreements nor negotiating my salary. My one-year review is coming up soon with my company, and I will definitely try to increase my salary and use the extra cash to pay down those loans! Thanks!

    • Sounds like a plan. In the event you don’t get the raise you want, make sure you ask for some guidance on what you need to do to earn the higher salary. Then do those things and make sure to meet with your boss six months before your review to go over everything. This will increase your odds of getting the raise you want.

  3. Great Article! Continuing to live like a college student is a fantastic way to go even if it means having a couple too many drinks at home to save money at the bar.

  4. These are all great ideas you made here Don. Suppose it’s like any loans, the fastest you get it paid off the better. I especially like your second point about continuing to living like you are still in college.

  5. Hi Don,

    I was able to get my interest rate down by going with direct withdrawls.

    I had a large amount of loans at a horrible interest rate. Much worse than today’s

    It is terrible that I am still trying to pay them off.

    If you have the ability to pay them off quickly, it is a great thing to do.

  6. I agree whole-heartedly with “live like you’re still in college.” I think a lot of people get out of school and start spending the way they think someone making a certain salary should be able to. Sure, if you’re making six figures straight out of college, you’ll probably be okay. However, even if you secure an amazing salary right off the bat, you still will have a heck of a time paying back that debt if you start living like a rock star and go out and buy a house and a new car right away.

  7. I fall right in line with your estimates. I finished grad school with about $20k in students loans.

    I work for a private employer that was kind enough to pay for half as long as my concentration would improve my skills relevant to my occupation. In order to justify the payment I would be making each month after graduation, my salary had to match that as well. To me, it didn’t make sense to pay for more school unless I could justify it economically.

  8. It can’t be much fun to have an outstanding loan which could take quite a number of years to pay off. Having a huge debt isn’t the best start to a career, so paying it off as quickly as possible makes a lot of sense.