How to pay off student loans faster

Find out how refinancing and more payments can help pay down student loans. (iStock)

A college education is valuable, but it's not cheap — and that's where student loans come in. Without student loans, which can come from both government and private lenders, it could be difficult to keep up with tuition. But it's important to try to minimize debt and save money. Students need to utilize budgeting tools and learn how to pay off student loans faster.

Roughly 44.7 million Americans saddled with student loan debt, according to the Federal Reserve. The average graduate has about $35,397 in federal student loan debt, according to the Department of Education. Most of the debt is federal loans with private loans making up just a small portion.

Although federal loans are more popular, some find value in choosing private student loans over federal loans. If you're interested in private student loans, consider using Credible's free online tools to browse private lenders and compare rates.

If your goal is to pay off your loan early, there are at least five options to consider.

How to pay off student loans ASAP

  • Set up autopay: Believe it or not, just adjusting how you pay your student loans can have an impact. If you use autopay, which allows the lender to automatically deduct the amount owed each month from your bank account, you can be rewarded with a reduced interest rate. That amount is often around .25% which can add up and allow more cash to go toward paying down the principal balance. An added bonus is that you’ll never have to worry about accumulating fees because of a missed payment.  
  • Make bi-weekly half-payments: While most people typically pay once a month, adjusting your student loan payment to twice a month amounts to one extra payment a year. That payment can go a long way in helping to reduce your principal balance much sooner. Just cut your monthly payment in half and make payments every two weeks. For instance, if you pay $500 a month, try paying $250 every two weeks instead. It’s a fairly effortless change that can help pay off that student loan faster and you wind up saving money on the interest. To lower monthly payments altogether, check out Credible to compare private lenders' refinancing offers.
  • Refinance student loans: You can take your loans and have them bundled into one payment if you refinance. With this method the lender will pay off your federal and private loans for you and your only debt is to that one lender. If you go the refinance route, remember the objective is to get a lower interest rate and more favorable payment terms. In other words, with a refinance, your monthly student loan payment should decrease and the pay-off completion date is much closer than it would have been. Use Credible to see just how much you could save by refinancing today.


  • Pay capitalized interest off first: Get rid of any interest that has built up on the loan over time. This is called "capitalization," when the unpaid interest is tacked on to your principal balance. It happens most frequently after no payments have been made on your loan over time thanks to the grace period ending or your loan reemerging from a forbearance or deferment.  
  • Take advantage of lump sum windfalls: Use that holiday bonus, annual raise, tax refund or milestone birthday gifts to go toward your student loan. The Consumer Financial Protection Bureau advises borrowers to pay a little extra each month to get that balance down.

What is the average time it takes to pay off a student loan?

In 2019, the Department of Education reported the average repayment period for student loan holders with between $20,000 and $40,000 in federal student loan debt is 20 years. Those who had $60,000 or more took about 30 years to repay their student loan debt.

Depending on the payment terms, the Consumer Financial Protection Bureau agreed it can take anywhere from 10 to up to 30 years for borrowers to pay off their student loans. But that doesn't mean you have to be stuck with a decade or more of student loan payments.


Make sure you know how to create a budget for yourself. A budget is a great way to help account for your monthly spending and save extra money. If letting go of small luxuries like pricey coffee drinks, home delivery membership fees and shopping trips, means more money to put toward your student loan debt, then it’s worth it. Most importantly, explore each option listed thoroughly and come up with a strategy to paying off the loans.

Refinancing, in particular, is becoming an increasingly popular choice as student loan refinancing rates drop to dramatic new lows. If you want to take advantage of low rates to save extra money, use Credible to see which offers make the most financial sense for you.


Paying off your student loans early translates not only to more money in the bank, but if you‘re in the market for a big purchase like a home, not being saddled with student debt can lead to lower interest rates, better credit, and an easier qualification process. Not to mention the peace of mind that being student loan debt free brings.