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It takes borrowers years- and sometimes even decades- to pay off student loans for good at the end of their loan period. In fact, a 2019 study from New York Life found that the average respondent reported taking 18.5 years to pay off their student loans, starting at age 26 and ending at 45. Your student debt payment trajectory has a lot to do with your other circumstances: the size of your balance, your interest rate, income and your private monthly expenses. However, there are steps that borrowers can take to speed up the process. Below, Select gives three tips for paying off student loans fast- plus what to consider before you spend all your time to pay off this balance well before the term is over.
1; Pay more than the minimum amount due. Perhaps the most obvious, but paying more on student loans is the fastest way to get rid of them.
Whether it's$ 20 or$ 100 more each month, every bit over the minimum payment really helps to make a dent in your debt. If you have n't spent your third stimulus check yet, or that year you 're expecting a refund, you could put these windfalls of cash toward your student loan debt. Just make sure when you make extra payments that you select the option for the funds to be applied toward your loan principal. How can I increase my income so I can pay more than the minimum of my college loans payments? If you do n't have the extra cash right now to afford paying off my balance, consider taking on a side hustle and funnel that extra money towards principal payments. These days, it's easier than ever to make some extra cash. Use apps like TaskRabbit or Craigslist to find quick jobs that you can do in your spare time. With spring cleaning season upon us, consider reselling any of your old items on Facebook Marketplace, help to clean your neighbor's house or help with their landscaping as we head into summer. Have you got a particular knowledge of a specific topic? Online tutoring can be done virtually from your home with online services like Chegg Tutors. Online tutoring can also come in the form of teaching skills like cooking, crafting, music, language and fitness lessons. If you want to be a language teacher online, check out our resources like Skillshare for a variety of different teaching options and Verbalplanet. From the comfort of your home, you can also get paid to take consumer surveys online through sites like Survey Junkie, Swagbucks and Vindale Research.
2; Sign up for autopay to get interest rate deductions. Enrolling in autopay with your student loan servicer is a no-brainer: This guarantees that you 'll never miss a monthly payment and most loan servicers even offer an interest rate discount of 0.25% when you sign up for automatic payments.
While a 0.25% reduction may seem small, it's a considerable amount of money in the long term when you 're paying off your student loans. Any decrease in interest rate will help you pay off your loans faster as it lowers the overall cost of your loan. Refinancing student loans means swapping out a new loan for one brand new loan via a private lender.
The goal of refinancing is to get a new interest rate while also having the ability to choose a lower term of loan. For example, a borrower who qualifies for refinancing can shorten their loan term from 10 years to five years so that they can pay off student debt faster. While this shortened timeline would require the borrower to pay higher monthly payments, they would be repaying their student loans in half the time. Select analyzed and compared top loan refinancing options from national banks, credit unions and online lenders to rank your best options. Here are the best companies to choose for student loan refinances: Should I have a co-signer: CommonBond Student Loan Refinancing is generally a good option for the student loan borrowers with good or excellent credit who are paying a high interest rate on their loans. However, with federal student loan payments and interest on pause until September 2021, now is not a good time to refinance your federal student loans.
However, private student loan holders may be able to score a lower interest rate that makes refinancing worthwhile. What to consider before paying off student loans early? Note: Opinions, analyses, reviews or recommendations expressed in this article are the original of Select editorial staff and have not been reviewed, approved or otherwise endorsed by any third party.